Preference continues to be for two-year fixed rates rather than five
The demand for shorter-term fixed-rate mortgages is continuing, according to analysis of mortgage search activity on Moneyfactscompare.co.uk.
It found that the share of users searching for two-year fixed-rate mortgages increased from 48.4% in February to 55.9% in June, while those looking for five-year fixed deals fell from 27.7% to 22.9% over the same time.
The demand for short-term deals is strongest for those looking to remortgage, with demand for two-year fixes for a remortgage up from 59.5% to 66.5%, compared to homemovers, which was up from 40.9% to 52.1%.
Reluctance to lock-in long-term
Adam French, head of consumer finance at Moneyfactscompare.co.uk, said: “Borrowers are still reluctant to lock themselves into longer-term deals and instead are favouring the flexibility of a two-year fix as expectations for lower mortgage rates continue to build. However, it isn’t an approach without risk. As recent years have shown time and again, our volatile times can have a rapid effect on borrowing costs.
“The shift is also being supported by pricing. Borrowers with more equity will typically find that two-year fixed rates are now slightly cheaper than comparable five-year deals, making shorter fixes attractive for those looking to refinance again if rates continue to improve.
However, he said the trend differed for first-time buyers and borrowers with smaller deposits. “At higher loan-to-value ratios, five-year fixed mortgages often continue to offer lower rates than comparable two-year deals, meaning these borrowers must weigh the lower initial cost against the flexibility of a shorter fixed term. That may help explain why first-time buyers appear to be diversifying their choices rather than overwhelmingly switching to two-year fixes.”
Mortgage term demand by buyer type
| Borrower type | Term | Feb 2026 | → | June 2026 |
| First-time buyer | 2-year fix | 66.3% | → | 65.5% |
| 5-year fix | 23.6% | → | 18.8% | |
| Homemover | 2-year fix | 40.9% | → | 52.1% |
| 5-year fix | 34.5% | → | 29.9% | |
| Remortgage | 2-year fix | 59.5% | → | 66.5% |
| 5-year fix | 25.2% | → | 20.5% |