Fixed mortgage rates plummet but less time for borrowers to secure a deal

Average mortgage rates fell throughout February as the average shelf-life of a deal dropped to just 16 days.

As lenders cut rates in February, average two- and five-year fixed mortgage rates saw their largest monthly drop since the start of October 2024, according to the most recent Moneyfacts UK Mortgage Trends Treasury Report.

The average two-year fix fell from 5.52% at the start of February to 5.39% at the start of March, while the average five-year fix saw a slightly smaller drop over the same period from 5.32% to 5.22%.

“The rate cutting momentum was prevalent during February, with the average two- and five-year fixed rates seeing their biggest cuts in almost six months,” noted Rachel Springall, Finance Expert at Moneyfacts.

“The churn of ranges and rate moves circulated around swap rate volatility, but also due to a drop to the Bank of England base rate near the start of the month. Lenders typically act within a couple of weeks of any fierce rises or falls to swap rates,” she explained.

With this level of activity in the mortgage market, the average shelf-life of a mortgage deal more than halved between February and March, falling from 36 days to just 16 days.

Good news for first-time buyers

Although affordability remains a challenge for those wanting to get on the property ladder, average rates for low-deposit fixed rate deals plummeted month-on-month.

For example, average rates on deals at 95% loan-to-value (LTV) fell by 0.11 percentage points (two-year) and 0.09 percentage points (five-year) in the month to March to stand at 5.83% and 5.63% respectively.

This fall in the average two-year fixed rate was the largest drop seen since September 2024.

Meanwhile, those with a larger deposit will find that the average two-year fixed rate on deals at 90% LTV also dropped by 0.11 percentage points to 5.69% in the month to March. The average five-year fixed rate fell from 5.47% to 5.40% over the same period.

In addition to lower rates, first-time buyers also have slightly more products to choose from than one month ago, as the number of products available at 95% LTV rose to 395 at the start of March, while the number at 90% LTV rose to 772.

Is now a good time to apply for a mortgage?

It wasn’t just low-deposit mortgages that saw a rise in availability, as the number of mortgage deals across all LTVs increased from 6,451 at the start of February to 6,684 at the start of March, the highest count since February 2008.

Those planning to take out a mortgage will be encouraged to see rates have fallen month-on-month and that there are now more deals to choose from. Some borrowers may be tempted to wait before applying for a mortgage in the hope of further rate reductions, but they should bear in mind that rates can be volatile and aren’t guaranteed to continue falling.

Moreover, in addition to the interest rate, it’s important to consider other factors when choosing a mortgage, including product fees and whether a deal offers any incentives, such as cashback or a free valuation.

Recent analysis by Moneyfactscompare.co.uk found that, as of 27 February 2025, 36% of fixed mortgage deals didn’t charge any product fees at all, while 22% offered cashback and 73% came with a free or refunded valuation. The variation between deals can make it difficult to work out which mortgage deal to choose, as the one with the lowest rate won’t necessarily offer you the best overall value.

If you’re not sure whether it’s the right time to start your mortgage application or which deal may be most suitable for you, it’s worth speaking to a broker for further advice and guidance. A broker can discuss your options with you and help you find the best mortgage deal for your situation.

Should I speak to a mortgage broker?

Mortgage brokers remove a lot of the paperwork and hassle of getting a mortgage, as well as helping you access exclusive products and rates that aren’t available to the public. Mortgage brokers are regulated by the Financial Conduct Authority (FCA) and are required to pass specific qualifications before they can give advice.

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