Is it time to rethink your mortgage fix? Here’s what’s really happening with the rates this week.
If you’ve been watching the news lately, you might have felt a bit jittery. Inflation has ticked up slightly to 3.4% (up from 3.2% last month).
It’s not great news, but let’s be honest—it’s a far cry from the scary 10%+ madness we saw back in 2022. Still, it’s enough to make the Bank of England play it cool and hold the Base Rate for now.
But here’s the bit that actually matters to your wallet: Mortgage rates are moving in a way we haven’t seen for a while.
In this Article:
The "Weird" Flip in Rates
For ages, locking in a 2-year deal was the expensive option. At one point in 2023, you were paying nearly 0.5% more just to fix for two years compared to five.
Well, that’s changed.
Right now, 2-year fixed rates are actually cheaper overall.
- Average 2-year fixed: Down to 4.25% (used to be 6.61%!)
- Average 5-year fixed: Sitting at 4.37%
It’s a small gap (0.12%), but for the first time in a long time, the shorter deal wins on paper. If you’ve been holding off because rates were sky-high, seeing them drop from the 6% peaks of last July is a massive relief.
What the Experts Are Saying
Matt Smith, our mortgage expert, reckons this hold was expected.
He says: "We’re still seeing some of the cheapest rates around since before the mini-Budget. It’s an encouraging start to the year... with many home-buyers taking advantage of lower mortgage rates to make their move."
Basically, even though the cost for lenders to fund these mortgages has gone up a tiny bit recently, they are fighting for your business. That competition is keeping rates decent for us.
So, What Should You Do?
1. If you’re on a Fixed Rate:
Relax. Nothing changes for you until your deal ends.
2. If you’re on a Tracker or Variable Rate:
Your payments stay the same this month. But with the next Bank decision not until Thursday, 19 March 2026, you’ve got a few weeks of stability.
3. If Your Deal Ends Soon (Panic Stations?):
Don’t wait until the last week. The 'Mortgage Charter' now lets you lock in a new deal up to six months early. This is a lifesaver if you’re worried rates might creep up again.
Falling onto your lender's Standard Variable Rate (SVR) is a mistake you don’t want to make right now—the average SVR is a painful 6.91%. Compare that to the 4.25% deals out there, and you can see why it pays to be organised.
When Will Rates Finally Drop?
The million-pound question. While the markets are guessing a cut might happen around June, the economy is a fickle beast. Everything depends on that inflation number behaving itself.
For now, take a look at what you can borrow. Getting a Mortgage in Principle is usually the best first step to see where you stand without hurting your credit score.
Keep an eye on this space—we’ll update you as soon as the Bank makes its next move in March.
