Six-month review of the mortgage market 2017 | 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.

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Published: 05/06/2017

The first half of 2017 has seen competition in the mortgage market ramp up yet again, with providers fighting for borrowers' attention by launching record low mortgage rates
across the board. As a result, average rates continue to fall, with our latest research showing that long-term mortgage rates continue to see the greatest cuts.

As the table below shows, the average five-year fixed mortgage rate has fallen by 0.04% since January to stand at 2.88%, while the average 10-year rate has fallen by double that amount to 3.12%, not far above its shorter-term counterpart. All averages are well below their levels at this point last year, too, so borrowers can continue to reap the rewards.

Average Rates Today
Jan-17 Jun-16
Two-Year Fixed Rate 2.30% 2.31% 2.57%
Five-Year Fixed Rate 2.88% 2.92% 3.17%
Ten-Year Fixed Rate 3.12% 3.20% 3.49%
Source: Compiled 01/06/2017

"The past six months have seen rates fall across the market, with some of the lowest rates on record reported in the first half of this year, clear signs that competition in the mortgage market is still rife," said Charlotte Nelson, finance expert at

And that's not the only thing to get excited about – not only have average rates fallen, but product numbers have increased significantly, which means borrowers have the ideal combination of low costs and plenty of choice. Indeed, the number of mortgages available at 75% loan-to-value (LTV) has risen by 81 to 904 since the start of this year, which means you've got a huge number of deals to choose from.

Things are going particularly well for the long-term sector, not to mention the first-time buyer (FTB) arena, as Charlotte continues:

"The traditional two-year fixed rate market seems to have become saturated due to heavy competition among providers, so although rates are still low, they're not showing the same level of reductions as they were previously. As a result, many providers have shifted their focus to longer-term deals, making borrowers now consider long-term fixed as an option to give themselves extra peace of mind.

"FTBs have had a good start to the year, too, with the number of first-time buyer mortgages at 95% LTV increasing from 242 in January to 287 today. Rates have also fallen in this key area, with the average five-year fixed rate at 95% LTV dropping from 4.63% to 4.58% over the same period."

However, there's no guarantee that the recent improvement in the market will continue, particularly given recent statistics from the Bank of England which show that the number of mortgage approvals is at a record low, while the Nationwide House Price index shows that average prices are starting to dip.

This suggests that the housing market is starting to stagnate, said Charlotte, which could "have a serious impact on the mortgage market, causing the growth we have seen at the very least to slow. However this might be compensated by borrowers looking to remortgage, which could be partly to blame for the small reduction in the average two-year fixed rate over the past six months.

"While the mortgage market is still buoyant, now would be a great time for borrowers to find themselves a cheap and cost-effective offering. Given the increased choice in the market, it is even more important for everyone to shop around to ensure they get the best deal for them."

What next?

Make the most of the competition in the mortgage market by finding the best mortgage rates available – use our mortgage Best Buys to get started, or head to our mortgage calculator for a more personalised overview of the best deals for you.


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.

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