Average fixed-rates have edged upwards since the start of the year, but recent product launches at below 1% suggest that competition might be starting to increase, according to Moneyfacts.co.uk.

Figures from the price comparison site show that average two-year fixes have inched up by 6 basis points from 2.52% in January to 2.58% today.

A year ago, average two-year fixes were substantially lower at just 2.02%.

Five-year fixes have followed a similar trend, with the average increasing from 2.71% in January to 2.81% today.

Last June the average five-year fixed was just 2.26%.

Longer term deals have also climbed, with the average 10-year fix rising from 2.85% in January to 2.98% today.

A year ago the average 10-year fix was 2.63%.

Average standard variable rates fell from 4.49% to 4.41% between last June and January, but they have remained static since then.

Moneyfacts finance expert Rachel Springall says: “The motivation to switch from a standard variable rate mortgage to a fixed rate may be obvious, but what is more evident over the past few months, is the peace of mind fixing for longer may offer. 

“Despite a rise to the average two, five and 10-year fixed mortgage rate over the past few months, it is still worth considering a new fixed deal.

“The volatility of interest rates is a response to the pandemic, as the mortgage market contracted whilst lenders focused on their existing customers and less so on new business. 

“However, the situation appears to be starting to change for the better in recent weeks as both rate competition and product volumes are starting to return.”

Borrowers switching from an SVR to a five-year fixed mortgage could save on average over £10,000 during their fixed rate period, based on a £200,000 loan over a 25-year repayment term, she says.

However, being able to move deals will depend on factors such as whether a borrower has been furloughed.

Springall adds: “The best deal will also depend on the overall package, so whilst there are some two-year fixed mortgages priced as low as 0.99%, they might not be the most attractive in terms of true cost, and borrowers would be wise to be wary of headline grabbing rates.

“Mortgage borrowing remains robust with the Bank of England highlighting the strongest figures seen since records began and this momentum may continue as normality returns and lenders launch new deals to entice new customers. 

“As more choice returns to the market and attractive deals grab the spotlight, navigating the mortgage maze could be easier if consumers seek out independent financial advice and take away the potential stresses of applying direct and managing the process to completion.”