There is renewed confidence in the market as more borrowers anticipate that mortgage rates will fall, Twenty7tec data suggests.
Last month, nearly half of all mortgage searches and European Standardised Information Sheet (ESIS) documents focused on short-term fixes.
Of the 1.92 million ESIS documents generated via the platform, 912,378 were for mortgage products fixed for two years or less – accounting for 47.7% of total activity.
This is an increase of 40.5% from October 2024 and 22% in September 2022.
Twenty7tec says these short-term fixes allow borrowers to secure a stable rate for now, while keeping their options open to switch if rates fall in the near future.
The data shows that borrower behaviour has continued to shift significantly in recent years.
In Autumn 2022, most borrowers opted for longer-term security, with the majority of ESIS documents focused on three- to 10-year fixes.
Meanwhile, in December 2022, when the base rate was 3.5%, short-term fixes climbed to 39.2% of the market.
In May 2023, when rates peaked, two-year fixes reached 42.8%, showing that short-term confidence was growing.
Twenty7tec says the rise in short-term fixes also reflects broader market sentiment.
With inflation easing and the Bank of England cutting the base rate to 4.25% in May – its first reduction of 2025 – market expectations of further rate drops later this year are building.
Borrowers appear to be positioning themselves to take advantage of possible future reductions, showing just how closely consumer sentiment is tracking wider economic signals.
Twenty7tec director Nathan Reilly says: “These shifts in product choice reflect changing borrower needs. In late 2022, many were looking for longer-term certainty as rates climbed. But by mid-2023, the mood had shifted – more borrowers were backing short-term fixes in the hope that rates would start to fall.”
“Borrowers who previously opted for 5- or 10-year deals during periods of volatility are now prioritising short-term flexibility – betting that mortgage rates may drop within their next refinancing window.”
“But what does this mean for advisers? With more customers choosing shorter-term deals, brokers need to be prepared for more frequent refinancing conversations. Now’s the time to ask whether your CRM system is ready – is it helping you stay in regular contact, track the client journey effectively, and keep your pipeline visible?”
Last week, Twenty7tec data showed 400,610 mortgage searches were recorded – making it the second busiest pre-decision week over the past year.
