Search trends show five-year deals losing ground as uncertainty over Middle East conflict feeds rate volatility
Mortgage borrowers have moved sharply towards shorter fixed-rate terms after recent interest rate increases, analysis of search activity on Moneyfactscompare.co.uk has indicated.
A review of mortgage comparisons made on the site in the 30 days to 2 April 2026, set against the 30 days to 2 March 2026, indicates a clear shift in preferences as pricing climbed.
Two-year fixed-rate products saw overall demand rise by 13%, suggesting borrowers are prioritising flexibility while the outlook remains unsettled. Over the same period, five-year fixes lost market share, with total demand down 9%. The drop was most pronounced among remortgage customers, where interest fell 15%, while demand from homemovers was down 9%.
There was also a rise in searches for variable-rate mortgages among homemovers, increasing by 47%, though this started from a low base. Variable-rate searches accounted for 12% of homemover activity.
| Mortgage Borrower Preferences by Term (Feb vs Mar) | ||||||
|---|---|---|---|---|---|---|
| Term | Total share (Feb) | Total share (Mar) | Month on Month change (February to March) | |||
| All borrowers | First-time Buyers | Home movers | Remortgage borrowers | |||
| 2-year fix | 48% | 55% | +13% | +20% | +15% | +11% |
| 5-year fix | 28% | 25% | -9% | +16% | -9% | -15% |
| Variable | 12% | 13% | +7% | -18% | +47% | -12% |
| Source: Moneyfactscompare.co.uk | ||||||
The rate movements appear to be influencing these decisions. Moneyfacts said two-year fixed rates were up 99 basis points (bps) and five-year fixed rates up 81bps when comparing the start of February with the start of April, while variable rates rose by 28bps over the same window.
| Change in average mortgage rates | |||
|---|---|---|---|
| Term | 1-Feb | 1-Apr | Difference |
| 2-year fix | 4.85 | 5.84 | +99bps |
| 5-year fix | 4.94 | 5.75 | +81bps |
| Variable* | 4.41 | 4.69 | +28bps |
| Source: Moneyfactscompare.co.uk. *Average 2-year tracker rate | |||
“The speed and scale of rate rises over the past few weeks has quickly shifted borrower behaviour,” said Adam French, head of consumer finance at Moneyfactscompare.co.uk. “With five-year fixes jumping by more than 80 basis points, many are pivoting towards two-year deals in the hope that the rate spike being driven by the conflict in Iran proves short-lived.
“Demand for five-year fixes is usually strongest among homemovers, who value certainty in their monthly payments, particularly as they have usually taken on a larger debt. Instead, there has been a dramatic swing towards shorter term options. Remortgage borrowers who are already facing significant payment shocks also appear reluctant to lock in at elevated rates for an extended period.
“Some borrowers may also be banking on rates falling sooner than the market is currently expecting. There has been a notable, if still relatively small, shift towards variable rate mortgages, especially among homemovers. While these products remain a minority choice, the uptick suggests some borrowers are willing to take on more risk, betting that rates could fall back in the near-term.”
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