A two-year fixed rate for people with a 40% deposit is currently the cheapest mortgage deal on the market, analysis from a property listing firm showed.
Rightmove’s weekly mortgage tracker found this was available at 3.86%, compared to the lowest available five-year fixed rate of 3.96%.
The cheapest two-year fixed rate was 0.09% lower than a week ago, while the five-year fix had increased by 0.04%. Both rates were more favourable than a year ago, with the two-year fix 0.6% lower than this week in 2024 and the five-year fix 0.17% cheaper.
At each loan-to-value (LTV) tier, Rightmove’s data showed that two-year fixed rates had either seen larger reductions than five-year fixes or been reduced, while the longer-term counterpart had risen.
At 60% LTV, the average two-year fixed rate was 0.01% lower than the week before at 4.24%, while the typical five-year fixed rate had gone up by 0.02% to 4.2%.
These represented annual reductions of 0.45% and 0.16% respectively.
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The average two-year fixed rate at 75% LTV was 4.62%, 0.02% lower than a week before and 0.44% less than last year. The typical five-year fixed rate was 0.01% higher week-on-week at 4.53%, and 0.2% cheaper than in 2024.
For a two-year fix at 85% LTV, the average rate was 4.87%, a 0.02% cut on last week, and the average five-year fixed rate was 4.72%, unchanged from the week before. Compared to the same period a year ago, these were reductions of 0.35% and 0.07% respectively.
The changes at the higher LTV tiers were more aligned, with similar reductions across two- and five-year fixes.
The average two-year fixed rate at 90% LTV was 0.04% lower than a week ago at 5.19% and the average five-year fixed rate was 0.03% cheaper at 4.91%. Compared to last year, these showed respective reductions of 0.27% and 0.08%.
For a two-year fix at 95% LTV, the average rate was 5.67%, 0.03% less than last week and 0.24% lower than last year. The average five-year fix was also 0.03% cheaper week-on-week at 5.37%. Compared to 2024, the rate was 0.11% less.
Bigger cuts for larger-deposit borrowers
Matt Smith, Rightmove’s mortgage expert, said: “Average mortgage rates at the top end of the market have fallen more quickly than for those with the smallest deposits over the past year. Someone with a 10% deposit is still looking at an average five-year mortgage rate of 4.91%, only slightly down from 4.99% at this time last year.
“By contrast, today someone with a 40% deposit is now looking at an average five-year mortgage rate of 4.2%, down from 4.36% – and we are still seeing some products below the 4% mark in this bracket.
“So while borrowing power has improved for first-time buyers, higher and slower falling mortgage rates for those with smaller deposits is still stretching affordability.”
