The difference between the average two-year and five-year fixed rate mortgage is at one of the lowest levels seen in over a decade, comparethemarket.com has revealed.

According to the latest Bank of England data, the average two-year fixed mortgage rate is now at 1.40% and a five-year fixed mortgage rate at 1.69% – a difference of 0.28 percentage points. In contrast, the average SVR today is 3.66%.

While the lowest point recorded in the last 10 years was 0.25 percentage points in Q4 2019, the difference has not been seen lower than this since 2008 at -0.03 percentage points.

Based on the average mortgage debt of £135,000 and a 75% loan-to-value, homeowners on a standard variable rate mortgage (SVR) could be paying nearly £2,000 a year more in comparison to those on the average two-year fixed mortgage deal. This is almost £1,700 extra compared to a five-year fix and over £1,000 more compared to the average 10-year fix rate.

There are approximately 800,000 borrowers who have been on a standard variable rate for more than six months.