The margin between two-year and five-year fixed rates is the smallest since February 2013 at 0.15%, as the average fixed rates reached a five year high, according to the latest data from Moneyfacts.

The average two-year fixed rate was revealed as 2.86% for April and is the highest since June 2015 after increasing by 0.21% since last month.

The five-year fixed rate totalled 3.01%, the highest since October 2016 when it stood at 3.02%, following a 0.13% month-on-month increase.

The report also revealed that the average two-year tracker rate for all loan-to-values (LTVs) increased by 0.18% month-on-month to 2.21%.

The rise represented an increase of 0.63% since December 2021, which is almost in line with the 0.65% increase that the base rate has experienced over the same time period.

Moneyfacts finance expert Eleanor Williams comments: “While fixed rates are not intrinsically linked to base rate and therefore are not set to rise exactly in line with its fluctuations, it is interesting to note that since December 2021 both the two- and five-year overall average fixed rates have risen by 0.57% and 0.42% respectively.”

“This compares to the average two-year base-rate tracker rate, which has risen by 0.63% since December, which is roughly in line with the 0.65% rise in base rate since then,” Williams adds.

April also saw the average standard variable rate (SVR) increase again, rising by 0.10% to 4.71%. The SVR has increased by 0.31% since December last year and is at a two-year high.

Williams says: “This is the highest this rate has been in two years (April 2020 – 4.71%) and means that borrowers sitting on the average SVR could potentially reduce their outgoings by over £200* per month by securing a mortgage in line with the current average two-year fixed rate.”

“The appeal to switch to a mid-term fixed rate such as a five-year deal over historically cheaper short-term fixed rates based on price has lessened as rates have risen.”

However, Williams highlights “there is no guarantee rates will not continue to climb”.

“The incentive to secure a competitive new fixed rate to provide shelter from potential further rate volatility remains, and as our top tables show, there are still products with extremely competitive rates available, but the support and advice of a broker in securing these could be wise,” she explains.

Meanwhile, borrowers hoping to secure a new mortgage product will see that shelf-life has plunged to 21 days again, which is the joint-lowest recorded by Moneyfacts.

Williams says the decline reflects “a busy period of re-pricing as lenders have reacted to three back-to-back base rate rises and continued wider economic volatility”.

“Those hoping to secure a new mortgage may wish to act sooner rather than later to lock in a competitive option, as not only have average rates continued on an upwards trajectory this month, but prospective borrowers may find that their selected products are not on offer for long,” Williams adds.