Beat inflation by fixing your mortgage for 5 years | will never contact you by phone to sell you any financial product. Any calls like this are not from Moneyfacts. Emails sent by will always be from Be Scamsmart.

MONEYFACTS ARCHIVE. This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Published: 03/04/2017

As inflation starts to bite and the cost of everyday goods rises, many people could be looking for ways to reduce the impact on their outgoings – which means now could be the time to think about fixing your bills so they don't rise for the foreseeable future. And what greater bill is there than your mortgage?

Inflation-proof your budget

Fixing your mortgage now, particularly for five years, could be a great way to inflation-proof at least part of your monthly outgoings. And, with our latest research showing that the average five-year fixed mortgage rate at 75% and 90% loan-to-value (LTV) has fallen by 0.32% in just one year, now could be an even better time to snap up a long-term deal!

Indeed, as the table below shows, the average rate at the lower end of the LTV scale has fallen considerably over the last year, too, which means there could be a cut-price deal available to suit every circumstance.

Average five-year fixed rate
Oct-16 Apr-17
60% LTV 2.60% 2.46% 2.39%
75% LTV 2.89% 2.73% 2.57%
90% LTV 3.69% 3.53% 3.37%
Source: Compiled 03.04.2017

"The five-year fixed rate market has been improving for some time now, with lenders trying to differentiate themselves from the competition and offering a diverse mortgage range," explained Charlotte Nelson, finance expert at "This has caused rates to fall as providers compete to be the lowest in the market."

This has had a huge impact on average rates. For example, just two years ago the average rate at 90% LTV was 4.41%, yet now it stands at 3.37% - an impressive 1.04% less, which means even someone with only a 10% deposit can now benefit from a fantastic rate, as competition ramps up across the market.

Repayment certainty

Now that inflation has risen above the Bank of England's 2% target for the first time in four years, the news that mortgage rates are still falling will be even more welcome. After all, even if the Bank doesn't raise base rate just yet, rising costs elsewhere will soon take their toll on people's pockets; this means that "five-year fixed mortgages can play a vital role in protecting borrowers from the rising cost of living," added Charlotte.

"Five-year fixed rates give borrowers some peace of mind, as they will know that their monthly repayments will remain unchanged for a significant period no matter what else happens. So, any borrower sitting on their Standard Variable Rate (SVR) or coming off an old deal would be wise to consider a five-year option, particularly as uncertainty builds in the economy."

Borrowers choosing to switch from their SVR to a five-year fixed rate deal could find themselves significantly better off, too. In fact, our calculations show that, based on today's average SVR of 4.56%, if a borrower were to opt for the average five-year fixed rate at 60% LTV of 2.39%, they would be £232.30 a month better off (based on a £200,000 mortgage over a 25-year term on a repayment-only basis). This could add up to a whopping £2,787.60 per year – think of what else you could do with that kind of cash!

However, you may want to be quick about it if you're thinking of taking the plunge. "While we don't know when rates will rise, or even by how much, we know rates cannot stay at these lows forever," concluded Charlotte. "Borrowers will have to weigh up the odds and decide if securing low monthly payments now is the best option for them."

What next?

Compare the best fixed mortgage rates to see how low your repayments could be

Saved money on your mortgage deal? Why not put the extra cash in a savings account? Check out the best savings rates to get started.


Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time. Links to third parties on this page are paid for by the third party. You can find out more about the individual products by visiting their site. will receive a small payment if you use their services after you click through to their site. All information is subject to change without notice. Please check all terms before making any decisions. This information is intended solely to provide guidance and is not financial advice. Moneyfacts will not be liable for any loss arising from your use or reliance on this information. If you are in any doubt, Moneyfacts recommends you obtain independent financial advice.

blue and green abstract pattern

Cookies will, like most other websites, place cookies onto your device. This includes tracking cookies.

I accept. Read our Cookie Policy