The average two-year fixed rate stands at 1.40% while the five-year rate comes in at 1.69% (figures rounded). This means the difference between a shorter and a longer mortgage fix is just 0.28%.

This is the lowest level seen since 2008, according to research by comparison site comparethemarket.com.

It added that while the lowest point recorded in the last ten years was 0.25% in late 2019, the difference hasn’t been seen lower than this since 2008 at -0.03%.

Given that there are around 800,000 borrowers who have been on their lender’s standard variable rate (SVR) for six months or more, averaging 3.66% today, mortgage holders could save thousands of pounds fixing their rate.

Although fixing for longer means higher interest rates, Comparethemarket estimated switching from a SVR to a five-year fix could reduce monthly payments by nearly £150 per month.

It also gives billpayers certainty of how much they’ll be paying each month and means they can lock in lower rates for a longer period of time. But switchers are urged to check fees before making the move.

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.

The table below outlines the possible savings, but excludes additional fees:

Mark Gordon, director of money at comparethemarket.com, said: “The longer you fix, the longer you are locked into a lower monthly payment. Considering the current economic environment and historically low interest rates, knowing what your monthly interest payments are over the long-term can provide greater certainty and peace of mind, making it easier to manage everyday finances.

“Staying on a lender’s standard variable rate mortgage can cost thousands of pounds more than is necessary. By re-mortgaging, this money can be used elsewhere or put into a rainy-day savings fund. While there are fewer mortgage products available on market than usual, there are still plenty of good deals to be found by shopping around online and comparing deals.”