The average five-year fixed rate has risen to its highest in two years despite lender efforts to remain competitive in the wake of the base rate rise earlier this year.
According to Moneyfacts, the average five-year fixed mortgage rate rose by 0.04 percentage points this month to sit at 2.95 per cent - up from 2.91 per cent in October.
This month’s figure was the highest recorded by the report since December 2016, when the average rate sat at 2.96 per cent.
Darren Cook, head of press at Moneyfacts, said lenders had tried to keep their five-year fixed rates as competitive as possible to attract borrowers looking to remortgage and mitigate any further rate rises by the Bank of England.
He said: "It seemed to be only a matter of time before providers increased their five-year fixed rates, as lenders could not continue to absorb the extra costs as a consequence of the base rate increase indefinitely, with many lenders having reassessed their options.
"Despite this, the pressure to remain competitive is far greater, and this is shown by the rate only increasing by 0.04 per cent this month and by just 0.08 per cent since the beginning of the year."
Mr Cook said it was unsurprising the market had seen an increased demand for five-year fixed deals as many borrowers looked for certainty in an uncertain economy.
He said: "Not only are borrowers looking for that extra peace of mind, but with lenders keenly pricing their five-year products, there is now very little difference between a traditional two-year product and its longer-term counterpart."
Rachel Lummis, mortgage adviser at Xpress Mortgages, said five-year fixed rate products had surged in popularity with new borrowers and homeowners looking to secure a low rate to allow for accurate household budgeting and offer protection from base rate rises.
Ms Lummis said choosing the right product came down to each individual's needs and circumstances, with five-year fixed rates best suited to offer security to borrowers who had no intention of moving in the near future.
She added: "As popularity for a five-year fixed has increased, the pay rate of these products have been decreasing with the increased competition from lenders.
"The most recent figures showing a two-year high for the average five-year fixed rate comes as no surprise."
Ms Lummis said the rates available on five-year fixed products differed from lender to lender and changed frequently, and advised borrowers seek whole of market advice from their mortgage adviser to navigate the best deals.