New research by Moneyfacts.co.uk has revealed a 73% surge in the number of five-year fixed-rate mortgage products over the past year.
As of today, a total of 634 deals exist for borrowers hoping to fix their mortgage for a five-year period. This is in contrast to just 366 deals over the same term this time last year.
Rates within the long-term fixed-rate market have also improved greatly. A five-year mortgage with a 90% loan-to-value today offers an average rate of 4.94% compared with 5.64% in April 2012.
Borrowers with larger deposits of 40% and over can also take advantage of lower rates, with a typical 60% loan-to-value deal offering 3.22%. This time last year this figure stood at 4.30%.
Sylvia Waycot, Editor at Moneyfacts.co.uk, claimed the perception of five-year fixed rate mortgages being an expensive first choice for many borrowers is beginning to change as a result of lenders enjoying cheap loans from the Government under its Funding for Lending Scheme.
"Under the scheme, borrowing the money is conditional to it being lent out in the form of mortgages and loans to SMEs and as the two-year fixed market is already saturated lenders are now heading full pace into the five-year arena.
"For once, this is actually excellent news. Mortgage rates have been on a downward trajectory for the last six months and the gap between fixing for two or five years is closing.
"Fixing your mortgage gives peace of mind from rate fluctuation and is also favoured as a means of household budgeting as you know from the outset what your payments will be for a set time period," concluded Ms Waycot.
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