The average mortgage rates on two and five-year fixed rate deals fell for the fifth consecutive month between December and the start of January, Moneyfacts has found.

Moneyfacts’ latest UK mortgage trends treasury report revealed that overall average two and five-year fixed rates fell by 5.93% and 5.55% respectively. The last time that these products were below 6% was in June 2023.

The average two-year fixed rate stands 0.38% higher than the average five-year equivalent.

Finance expert at Moneyfacts, Rachel Springall, said: "The consecutive reductions to the overall average two and five-year fixed mortgage rates will be of great relief for borrowers looking to refinance this year. The volatility surrounding mortgage rate pricing eased, as the average mortgage shelf life rose from 17 days to 21 days, the highest figure recorded in over six months.

"There are big expectations for fixed mortgage rates to fall in the coming weeks, so some borrowers may choose to wait patiently for the right time to change their deal or buy their first home."

The report also revealed that the average standard variable rate (SVR) fell slightly by 0.01% to 8.18%.

Product choice overall rose month-on-month for the sixth consecutive time, to 5,899 options, the highest level of availability for 15 years. The last time there were more deals available was March 2008, when 6,192 products were on offer.

Furthermore, the availability of deals at the 95% LTV tier (270) has increased to its highest level since September 2022, with the average shelf-life for a mortgage product rising to 21 days, the highest figure since June 2022 (22 days).

Springall added: "A rise in choice and cheaper mortgage rates are promising signs for those looking to refinance this year. However, those coming off either a two or five-year fixed mortgage will be paying around 3% more on their mortgage, based on our average rates, when they lock into a similar term for peace of mind. Despite this, it would be cheaper than reverting to a SVR, which charge over 8% on average.

"Borrowers with a limited deposit or equity, such as first-time buyers, are benefiting from an increase in product choice and lower mortgage rates.

"However, if borrowers can stretch their deposit to 10% then they will find greater choice and cheaper rates. Consumers would be wise to seek advice to assess the latest offers based on true cost and not be swayed by a headline grabbing rate."

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