Hundreds of fixed-rate mortgage deals drop below 5% – but is now a good time to fix?

See below, as well as our suite of Remortgage guides, for help if your deal is expiring soon.

Fixed mortgage interest rates are now widely available at below 5%

Mortgage rates shot up following the Government's mini-budget in September 2022, and fixed deals below 5% disappeared completely. These slowly began to return in November 2022, and rates have continued to improve since then, due to competition between lenders and increased political and economic stability. This week, for example, TSB cut rates on its fixed deals by up to 1.3 percentage points.     

Currently, remortgagers can find deals with interest rates as low 4.56% on two-year fixes and 4.38% on five-year fixes. If you're considering locking in for 10 years, interest rates are even better. Halifax has a 10-year fix at 4.04%, while Lloyds Bank has one at 3.99% – though this is limited to borrowers with an existing Lloyds current account, and you also have to consider whether you're happy locking in now when rates could fall further. 

Of course, a low rate doesn't necessarily mean that a deal is cheap as it might come with an expensive arrangement fee. You should also check product transfer rates – where you switch deal but stick with your existing lender – as these are competitive. You can compare rates using our Mortgage best buys tool.

What to consider before fixing

Whether it's a good time to lock in a new fix now will depend on your circumstances.

My mortgage deal is ending soon, or has already ended 

The most important thing is to avoid falling onto your lender's standard variable rate (the rate you revert to when your current deal ends). Some lenders' standard variable rates have edged over 7% recently – far higher than the most competitive fixed and variable deals.

If you want to fix now, remember that once you're locked, you won't be able to leave the deal early without paying a hefty fee. On the plus side, once you do you'll have certainty of what you'll be paying for the duration of the deal.

One option if you'd rather wait before fixing is to temporarily move on to a tracker mortgage, specifically one which lets you switch to a fixed deal penalty-free at a time of your choosing. Tracker rates are as low as 3.74% right now, though variable deals come with their own risks, such as your interest rate increasing if the Bank of England hikes the base rate. In December 2022, base rate rose for the ninth time in a year taking it to 3.5%. 

See our What mortgage to choose guide for the differences between fixed and variable deals.

My mortgage deal isn't ending for a few months

Here, you've got extra wriggle room and time to consider your options.

If you want a new fix, but can afford to wait before locking in, this might be worth doing. That's because some brokers and analysts believe interest rates will continue to edge down in 2023 – possibly to as low as 4%. You can read about their views in our Mortgage rates: 2023 forecast.

Of course, without a crystal ball, there is no way of knowing what's going to happen in future. This means that often the best course of action is to discuss your situation with a mortgage broker. See our Cheap mortgage finding guide for tips on speaking to brokers.