THE PROPERTY FILTER TAKE
Two-year fixed-rate mortgage searches rose from 48.4% to 55.6% between February and May 2026, while five-year fix demand fell from 27.7% to 21.8%, according to Moneyfactscompare.co.uk.
Borrowers are paying a small rate premium - two-year fixes averaged 5.78% versus 5.68% for five-year deals in May - betting that refinancing sooner will pay off when rates fall.
You may wish to speak to your broker about whether a shorter fix aligns with your refinancing timeline and any early repayment charge exposure on your current deal.
The share of mortgage borrowers comparing two-year fixed-rate deals rose from 48.4% in February to 55.6% in May 2026, according to search data from Moneyfactscompare.co.uk - even as two-year fixes carried a higher average rate than five-year alternatives. The trend is clear: borrowers are positioning for lower rates ahead, and they are willing to pay a small premium now to keep that option open.
The Rate Premium Borrowers Are Willing to Pay
The gap between the two main fix lengths has narrowed, but it has not disappeared. On 1 May, the average two-year fixed rate stood at 5.78%, compared with 5.68% for the equivalent five-year deal, according to Moneyfactscompare.co.uk. That 10 basis-point spread is modest, yet demand still shifted decisively toward the shorter term.
Adam French, head of Consumer Finance at Moneyfactscompare.co.uk, said the move was not being driven purely by pricing. "It appears many borrowers believe the recent spike in mortgage rates will prove temporary and are willing to pay a small premium for a shorter fix in the expectation that they will be able to refinance onto a more competitive deal in the future," he said.
The data backs that reading. Search interest in ten-year fixed mortgages fell from 6.5% to 4.5% over the same February-to-May period, per Moneyfactscompare.co.uk. Borrowers are not just avoiding five-year deals - they are actively moving away from any product that locks them in at today's rates for an extended period. For buy-to-let (BTL) investors already watching their ICR (interest coverage ratio) closely, the direction of travel on rates matters enormously. Our stress test calculator can show you how different rate scenarios affect maximum loan and rental coverage.
What the Broader Trend Shows
Strip out the monthly noise and the underlying picture is a steady, four-month rotation. The five-year fix share fell in every single month from February through May - from 27.7% to 25.1% to 23.2% to 21.8%, per Moneyfactscompare.co.uk. The two-year fix share, meanwhile, rose in three of the four months, hitting its high point in May.
This is not simply a reaction to one Bank of England decision. The rate tables from Moneyfactscompare.co.uk show that average two-year and five-year rates were broadly flat in February and March (around 4.84% and 4.95% respectively), then jumped sharply in April - two-year fixes moved to 5.84%, five-year fixes to 5.75%. Despite that rate spike, the shift toward shorter-term products continued. The search behaviour preceded the April rate rise, suggesting a structural change in borrower preference rather than a mechanical response to a single pricing event.
Mary-Lou Press, NAEA Propertymark president, struck a note of caution, warning that "affordability, future plans, and potential early repayment charges remain key considerations, making professional advice more important than ever in today's market." She added that the trend also pointed to improving housing market confidence - buyers appear comfortable committing to property without needing to fix their mortgage rate for five or ten years. For a deeper look at how rate strategy fits into wider property investment thinking, the property investment strategies hub covers the BRRR and BTL context in detail.
What to Watch Next
The credibility of the short-fix bet rests entirely on whether market expectations of rate cuts prove correct. If rates stay high through 2027, borrowers rolling off two-year deals will face a refinancing market no better than today's - and potentially worse if swap rates move against them. The gap between five-year and two-year rates is also worth tracking: at just 10 basis points in May, it offers little cushion for getting the timing wrong. Follow the latest analysis on our negotiation and finance hub.
Key takeaways
• Two-year fixed-rate mortgage searches reached 55.6% of all fix comparisons in May 2026, up from 48.4% in February, per Moneyfactscompare.co.uk.
• Five-year fix demand fell every month from February to May, dropping from 27.7% to 21.8% over the period.
• The average two-year fixed rate was 5.78% in May - 10 basis points above the five-year average of 5.68%, yet borrowers still chose the shorter term.
• Ten-year fix searches fell to just 4.5% in May, from 6.5% in February, showing borrowers are reluctant to commit to current rates for the long term.
• The bet on shorter fixes only pays off if rates fall materially before the next refinancing window - early repayment charges and affordability checks apply at remortgage.
The share of mortgage borrowers comparing two-year fixed-rate deals rose from 48.4% in February to 55.6% in May 2026, according to search data from Moneyfactscompare.co.uk - even as two-year fixes carried a higher average rate than five-year alternatives. The trend is clear: borrowers are positioning for lower rates ahead, and they are willing to pay a small premium now to keep that option open.
The Rate Premium Borrowers Are Willing to Pay
The gap between the two main fix lengths has narrowed, but it has not disappeared. On 1 May, the average two-year fixed rate stood at 5.78%, compared with 5.68% for the equivalent five-year deal, according to Moneyfactscompare.co.uk. That 10 basis-point spread is modest, yet demand still shifted decisively toward the shorter term.
Adam French, head of Consumer Finance at Moneyfactscompare.co.uk, said the move was not being driven purely by pricing. "It appears many borrowers believe the recent spike in mortgage rates will prove temporary and are willing to pay a small premium for a shorter fix in the expectation that they will be able to refinance onto a more competitive deal in the future," he said.
The data backs that reading. Search interest in ten-year fixed mortgages fell from 6.5% to 4.5% over the same February-to-May period, per Moneyfactscompare.co.uk. Borrowers are not just avoiding five-year deals - they are actively moving away from any product that locks them in at today's rates for an extended period. For buy-to-let (BTL) investors already watching their ICR (interest coverage ratio) closely, the direction of travel on rates matters enormously. Our stress test calculator can show you how different rate scenarios affect maximum loan and rental coverage.
What the Broader Trend Shows
Strip out the monthly noise and the underlying picture is a steady, four-month rotation. The five-year fix share fell in every single month from February through May - from 27.7% to 25.1% to 23.2% to 21.8%, per Moneyfactscompare.co.uk. The two-year fix share, meanwhile, rose in three of the four months, hitting its high point in May.
This is not simply a reaction to one Bank of England decision. The rate tables from Moneyfactscompare.co.uk show that average two-year and five-year rates were broadly flat in February and March (around 4.84% and 4.95% respectively), then jumped sharply in April - two-year fixes moved to 5.84%, five-year fixes to 5.75%. Despite that rate spike, the shift toward shorter-term products continued. The search behaviour preceded the April rate rise, suggesting a structural change in borrower preference rather than a mechanical response to a single pricing event.
Mary-Lou Press, NAEA Propertymark president, struck a note of caution, warning that "affordability, future plans, and potential early repayment charges remain key considerations, making professional advice more important than ever in today's market." She added that the trend also pointed to improving housing market confidence - buyers appear comfortable committing to property without needing to fix their mortgage rate for five or ten years. For a deeper look at how rate strategy fits into wider property investment thinking, the property investment strategies hub covers the BRRR and BTL context in detail.
What to Watch Next
The credibility of the short-fix bet rests entirely on whether market expectations of rate cuts prove correct. If rates stay high through 2027, borrowers rolling off two-year deals will face a refinancing market no better than today's - and potentially worse if swap rates move against them. The gap between five-year and two-year rates is also worth tracking: at just 10 basis points in May, it offers little cushion for getting the timing wrong. Follow the latest analysis on our negotiation and finance hub.
Key takeaways
• Two-year fixed-rate mortgage searches reached 55.6% of all fix comparisons in May 2026, up from 48.4% in February, per Moneyfactscompare.co.uk.
• Five-year fix demand fell every month from February to May, dropping from 27.7% to 21.8% over the period.
• The average two-year fixed rate was 5.78% in May - 10 basis points above the five-year average of 5.68%, yet borrowers still chose the shorter term.
• Ten-year fix searches fell to just 4.5% in May, from 6.5% in February, showing borrowers are reluctant to commit to current rates for the long term.
• The bet on shorter fixes only pays off if rates fall materially before the next refinancing window - early repayment charges and affordability checks apply at remortgage.
Frequently asked questions
Frequently asked questions
Why are borrowers choosing two-year fixes when they cost more than five-year deals?
How big is the rate difference between two-year and five-year fixed mortgages right now?
As of 1 May 2026, the average two-year fixed rate was 5.78% and the average five-year fixed rate was 5.68%, a gap of 10 basis points, according to Moneyfactscompare.co.uk.
What are the risks of choosing a shorter fixed-rate mortgage?
If rates do not fall as expected, borrowers on two-year fixes will remortgage into a market that may be no cheaper - or more expensive - than today. Early repayment charges and new affordability assessments at refinancing also apply.
What should BTL investors consider when choosing a fix length?
Has this shift happened before in the UK mortgage market?
