Despite a slight increase in fixed mortgage rates as we moved into April, there’s a silver lining for potential homeowners and those looking to refinance.

According to the Moneyfacts UK Mortgage Trends Treasury Report, the journey from March to April saw a modest rise in the average rates for two- and five-year fixed mortgages. Specifically, the two-year fixed rate inched up from 5.76% to 5.80%, and the five-year rate from 5.34% to 5.39%. Though this might sound alarming at first, it’s crucial to note that this rise is less steep compared to the previous month’s escalation.

A Look Back Offers Comfort

Rachel Springall, a Finance Expert at Moneyfacts, offers a comforting perspective, “It is worth noting that both the average two- and five-year fixed rates are lower than they were back at the start of 2024. Borrowers will find rates are significantly lower compared to six months ago, when the average two- and five-year fixed rates were 0.67% and 0.58% higher respectively.”

Market Optimism with More Choices

For those gearing up to secure a mortgage, the market has never been more welcoming since February 2008. As of the start of April, there are 6,307 mortgage products available, marking a significant leap from the 5,146 options available last April. This increase in product availability, especially for first-time buyers and those with smaller deposits, is a promising sign. The number of deals available for borrowers seeking 95% loan-to-value (LTV) ratios climbed to 335 from 318 in March, and 90% LTV deals rose from 761 to 774. The growing number of deals, particularly those catering to borrowers with smaller deposits or limited equity, illustrates a thriving and accommodating market.

Time on Your Side

Another positive development is the extended shelf-life of mortgage products, now averaging 22 days compared to 15 days in March. This longer availability period grants borrowers the luxury of time to thoroughly compare and choose the best deals without feeling rushed.

To Fix or Not to Fix?

The question of whether to lock in a fixed-rate mortgage or not is more relevant than ever. Despite the slight increase in average fixed rates, opting for a fixed deal remains a prudent choice for many, especially when the average Standard Variable Rate (SVR) hovers above 8%. However, those nearing the end of their fixed-rate period should brace for potential increases in their monthly payments. Springall warns that exiting a two- or five-year fixed rate in 2024 could mean facing interest rates up to 3% higher than before—a substantial hike from the rates seen in previous years.