Average mortgage rates on two and five-year fixed rates fell by 0.06% and 0.01% to 5.12% and 5.09% respectively in May, falling by much smaller margins than the month prior, according to the latest Moneyfacts figures.
Average two and five-year fixed rates were last lower in September 2022 (4.24%) and November 2024 (also 5.09%) respectively.
The average five-year fix is now 0.41% lower than a year ago, compared to the average two-year fix which has fallen by 0.81% over the same period.
The average two-year fixed rate remains 0.03% higher than the five-year equivalent but this is the lowest the gap has been since rates became inverted in October 2022.
The average shelf-life of a mortgage product fell to 17 days, from 19 days a month ago, now at its lowest count since March 2025.
Product choice overall fell month-on-month, to 6,843 options, but remains up year-on-year from 6,629 in June 2024.
The average two-year tracker variable mortgage rate fell to 4.91%, the first month it has fallen below 5% since March 2023.
The average SVR fell to 7.48%. In comparison, the highest recorded was 8.19% during November and December 2023.
Rachel Springall, finance expert at Moneyfacts, said: “Lenders were busy repricing their mortgage ranges during May, but the margins of cuts to the overall two and five-year fixed average rates were much smaller than seen a month prior. While the Bank of England base rate cut last month could be celebrated by borrowers, lenders can move rates in the opposite direction if swap rates rise. This can also cause opposing rate moves on longer-term fixed versus short-term, depending on the divergence of swap rates. A deeper dive into the LTV tiers shows the average five-year fixed rate at 60% LTV rose by 0.07%, whereas the same LTV tier on a two-year fixed fell by 0.07%. Overall, the average two-year fixed rate fell by 0.06% but the average five-year by just 0.01% month-on-month. This means the rate gap between the average two and five-year fixed rates is the smallest it’s been since the inversion in rates started in October 2022, when the five-year was last higher than its two-year counterpart.
“Product choice for residential mortgages dipped slightly month-on-month and while this might be counterintuitive from the rises seen over the last couple of months, the drop was relatively modest (150 options). Choice overall is still higher than at the start of 2025, and deals at the higher loan-to-value tiers are plentiful, despite also experiencing a small monthly dip. This churn of mortgage deals can occur if lenders pull and replace deals to cope with interest rate moves and borrower demand. The flow of changes led to a drop in the average shelf-life of a deal to 17 days, now at its lowest point in three months. This may further prompt the millions of borrowers due to refinance this year to seek advice and secure a new deal. First-time buyers on the other hand may feel it’s not quite the right time to get a mortgage if they are struggling with the cost of living, but it’s always worth getting independent advice to assess the variety of options available. Lenders have been reviewing their stress testing over recent weeks, so some first-time buyers who have struggled with affordability criteria might be surprised to find they could now be eligible.”
