What next for mortgage rates?
It’s the best time in seven years to take out a longer mortgage as new data shows the gap between 2 and 5 year fixes has reduced to near record lows.
2 year fixes have plateaued in price over the past few months, following a prolonged period of falling rates thanks to fierce competition among lenders.
But longer term fixes have continued to fall, narrowing the gap between 2 and 5 year deals, according to research from financial experts Moneyfacts.
The average 2 year fixed rate deal has fallen by 0.03% from January to 2.49% this month, while the average 5 year fixed rate deal has decreased by 0.09% to 2.85% over the same period.
The gap between the two now stands at just 0.36%, the narrowest margin since January 2012.
A 10 year fix sounds like a great idea if you know exactly how your life is going to pan out over the next decade. As very few of us do, the extra security a 10 year deal brings is a trade-off against how flexible you want to be in the future.
The same can be said for a 5 year deal, although to a lesser extent.
If you find a deal you like the look of, read the small print to see what early repayment charges you may be liable for.
The world of mortgages can seem complicated, and with all the fixed rate, discount, tracker and offset mortgages out there, choosing the right deal can feel like a minefield.