Low rates not enough to tip borrowers into 5-year mortgages

He continued: "If clients want flexibility to have the whole of the market available if they move, or want to sell their property and repay the mortgage, long term mortgages with their excessive ERCs, may not be suitable."

Whilst the hefty fees are partly to blame for the slow uptake, Sykes also pointed to the “paradigm shifts in society” following the pandemic.

“Borrowers are not prepared to commit to longer terms even if it is in their best interests in terms of cost efficiencies on account of the fact they are wary of what could happen.”

Bell thinks first-time buyers fit these longer-term mortgages and are willing to sign up, but that regulator tests on rate volatility are what fences such borrowers. 

He said: "You have to ask: 'Can you afford it at 3 per cent? But can you also afford it at 7 per cent?' That’s why buyers can’t get on the ladder."

Five-year fixed-rate mortgages are not the only products undergoing significant rate cuts. HSBC and Nationwide are some of the latest lenders to offer mortgage rates below 1 per cent on two-year fixed-rate products. Some have already dubbed the rush to sub-1 per cent levels a "rate war".

But as Karen Noye, a mortgage expert at Quilter, highlighted: “New and competitive deals will help drum up business for the lenders and keep customers coming through the door.”

Rather than products designed to help borrowers, Noye explained these mortgages were more a reflection of lenders’ worries over “government schemes designed to keep the housing market afloat during the pandemic” ending.

And whilst shorter term mortgage deals are seemingly more popular, they also come with their own drawbacks.

“These rates are not all they seem,” said Sykes. “In actual fact, [they’re] only available to the highest quality of clients, for instance those with an absolutely perfect credit score and a loan-to-vale of 60 per cent or lower.”