"Borrowers coming to the end of a two-year fixed deal will find they can now get the extra security of a longer term for a similar price to their old two-year deal."
The average rate has fallen from 3.30% in November 2015 to 2.98% this month.
Borrowers opting for the average rate could be £100 better off per month compared to two years ago, based on a £200,000 mortgage over a 25-year term.
Charlotte Nelson, Finance Expert at Moneyfacts, said: “The average five-year fixed rate dropping below 3.00% is great news for borrowers.
“Just 20 months ago, the average two-year fixed rate stood at 2.97%. This means that borrowers coming to the end of a two-year fixed deal will find they can now get the extra security of a longer term for a similar price to their old two-year deal.
“Competition remains high in the mortgage market and providers are finding the more traditional two-year fixed rate market becoming saturated with deals. Providers are therefore looking at different avenues to diversify, and the longer term fixed market is just that.
“With the gap between the average two-year fixed rate (2.35%) and the average five-year fixed rate standing at just 0.63% today, borrowers can now opt for the security of a longer term fixed rate with little extra cost to their monthly repayments.
“Borrowers coming to the end of their fixed deal or those who are currently sitting on their SVR should seriously consider opting for a new fixed rate now, as there is no way of telling how low these deals can go.”
