Two-year fixes start to usurp five-year deals: LMS

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The 2017 interest rate rise sparked renewed demand for two-year fixed rate mortgage deals and curbed appetite for five-year loans, LMS says.

Two-year deals had fallen from a 30 per cent market share in March 2017 to 20 per cent in October.

But appetite for two-year fixes rose to 23 per cent in November following a Bank of England decision to raise base rate on the 2nd of that month.

Demand for five-year fixed deals fell for the first time in ten months.

LMS chief executive Nick Chadbourne says: “By finally moving to increase the Bank Rate, the Governor of the Bank of England seems to have left people concerned about how they are going to handle the next two years instead of trying to forecast how they can handle the next five.

“Having searched for certainty in the run up to the rate rise, consumers are now looking at what’s in store for them more immediately.”

While five-year fixed products have become less popular recently, historically demand is still very high.

Five-year fixes’ 43 per cent market share in November is still the second highest figure on record.

Last November the figure was just 7 per cent.

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