Halifax offering five and 10 year fixed rate mortgages at lower rates that their two year deals

Five and 10-year fixed mortgages are being offered at cheaper rates than two-year fixes at one major lender, as people seek to lock in monthly payments for as long as possible due to the cost-of-living crisis. Halifax has launched a two-year fixed rate of 2.54% with a £995 fee, for those with deposits of 40% or more. But the comparable five and ten-year fixed rates are less at 2.48% – marking a potential turning point in the mortgage market.

The fee-free options have an even wider rate gap, priced at 2.94% for a two-year fix and 2.82% for a five-year. For those with lower deposits, the rates on two-year fixes are also more expensive – but only just. Mortgage borrowers traditionally pay a premium for longer terms, as they get the benefit of securing their rate at the same level for longer. And until recently two-year fixes were much more popular, meaning that banks could charge lower rates on them to attract customers. But the rising cost of living crisis has seen borrowers flock to five-year fixes as they seek the certainty of locking in their monthly payments for five years - meaning banks can potentially attract even customers by pricing these competitively.  Experts say lenders are also worried about the impact of the cost-of-living crisis on their customers' ability to pay their mortgages - meaning that they are keen on fixing rates for longer, too.