5.98%. That was the average two-year fix on 5 October, according to Moneyfacts, the highest since mid-December 2023. The average five-year fix: 6.00%.

On those averages the gap is about £3 a month on a £250,000 repayment mortgage over 25 years. Less than a sandwich.

So, if the price is the same, which one does your firm recommend? Be honest. Mostly the two.

Not because two years suits the client. Because two years comes back.

Most advisers know the logic. A five-year fix moves your next paid conversation with that client from month 24 to month 60. The two-year renewal is something you can see from here. Month 60 is a long way off, and a long way off feels like never. So, the short fix feels like guaranteed income.

It isn’t. Retention on existing remortgage clients is below 50%.

More than half of the clients you were so keen to see back at month 24 end up with their lender, or with somebody else. The “guaranteed” renewal is a coin flip with worse odds than a coin.

That number doesn’t enter the adviser’s head when the term gets chosen. If it did, they’d say what they already half-believe. Better 50% in two years than nothing in five.

Fair to the advisers, the arithmetic backs them. Take 100 clients and keep the sums easy. At 50% retention, a two-year fix brings 50 back at month 24, and 25 of those back again at month 48. That’s 75 renewals by month 48. A five-year fix gives you 50 at month 60, at best. Probably fewer, because five years without a reason to ring loses more people than two years.

Illustrative, not data. But it’s the sum most advisers are doing without writing it down.

So, the adviser isn’t being daft. The adviser is being rational about an income stream that depends on the deal expiring.

That’s the trouble. You’ve built a firm whose income leans on the fix ending. You shorten the fix, then you lose half of them anyway. Then you do it again.

A coin flip, taken every two years, to protect income you can’t actually rely on.

And the client on the other side of the desk assumes the term was chosen for them.

Some of the time it was. Nobody means any harm by it. But some of the time it was chosen for the diary, and the file says “client wanted flexibility.” That’s what the client said. It isn’t what the adviser weighed. Anyone reading that file later will want your reasoning for this client, this year, with two rates level. Not the diary.

I’m not telling you to switch to five years. At today’s retention the short fix pays more. That’s what’s wrong with it.

The fix length shouldn’t be a money decision for your firm. Right now, it is, and the thing making it one is the number nobody looks at.

Get paid for something other than the expiry date. A proper review every year. A call when something in the client’s life changes, not when their rate does. A quarterly phone call, just to check in.

Picture two clients, same case, same rate. One got a two-year fix and heard nothing until a rate-reminder email in month 20. The other got a five-year fix and a review every year, and a quarterly check in. Which one rings you back?

A five-year client you’ve spoken to every quarter is a client, not a month-60 gamble. You’ve given them a reason to ring you. And a two-year client you only ring at month 20 is the same gamble, just sooner.

That’s the work.

Two things this week.

Pull 20 completed cases from the last six months. Other advisers’ cases, not your own. Write down the term chosen and find the sentence in the file saying why it suited that client. Count how many you find.

Then take every client whose fix ended in the last twelve months and count how many you spoke to before it ended. That’s your real retention number. Not the one you assume.

Most owners will skip it. They’ll say there’s no time. That isn’t it. They’ll skip it because the file will show terms chosen for the diary, and the number will be lower than the one they’ve been telling themselves.

If it’s low, you haven’t got a fix-length problem. You’ve got a firm that only talks to clients when it’s about to be paid.

The two-year fix isn’t advice.

It’s a diary entry.

Paul Flavin is a business coach specialising in mortgage firm owners and the author of Build Scale Sell