HSBC made improvements to buy-to-let mortgages on Wednesday whilst also cutting interest rates on hundreds of its residential mortgages.

Today Barclays announced a number of mortgage rate cuts which become effective on Friday 14 March.

These cuts follow rate reductions from other high street lenders in the past few weeks including Santander and Nationwide.

Meanwhile, Moneyfacts reported, month-on-month the average two- and five-year fixed mortgage rates fell by their biggest margins in almost six months.

At the beginning of this week, it said typical rates on the average two- and five-year fixed rates dropped by 0.13% and 0.10% to 5.39% and 5.22% respectively. These falls were the biggest monthly cuts since the start of October 2024, it said.

Should you fix for two or five years?

Currently, two-year fixed rate mortgages are more expensive than five-year deals. Moneyfacts said average two-year fixes are just 0.17% higher than their five-year counterparts. The gap is narrowing between the two – it hasn’t been this close since January 2023 when it was at 0.16%.

For borrowers, however, it can be confusing when it comes to choosing the best option.

Gemma Bennett, senior mortgage adviser at The Mortgage Mum, writing in our sister website, What Mortgage, said with more Bank of England interest rate cuts on the horizon in 2025, it could be tempting to gamble on the short-term flexibility of a two-year fix – but this comes with risk.

“The five-year option may not be as thrilling if rates fall, but it offers peace of mind and predictability in an uncertain world,” she continued.

“As with any decision, it’s about balance—being informed, understanding your tolerance for risk and preparing for what lies ahead.”

There are other options for those who are not sure which fixed rate to choose. Nicholas Mendes, mortgage technical manager at John Charcol, said: “Some may choose to fix their rate now for certainty, while others may opt for a variable or tracker mortgage in the hope that rates fall later in the year.”

Indeed, tracker mortgages are less likely to have early repayment fees so they can be more flexible.

But the best advice for anyone taking out a mortgage – whether you are looking for a new deal or buying a home – is to speak to an adviser.

Mendes added: “With so many factors at play, speaking to a mortgage broker can be invaluable. A broker can help borrowers stay informed about rate movements, explore the best available deals, and ensure they secure a mortgage that suits their circumstances.”