Brokers push borrowers to two-year mortgages, whistleblower claims

Mortgage brokers are steering borrowers toward two-year fixed-rate deals to boost commissions, according to a whistleblower at a major mortgage lender who spoke to This is Money on condition of anonymity.

The whistleblower's allegations come as new data show borrowers moving decisively away from long-term fixed mortgages. Searches for two-year fixed rates by mortgage brokers rose from 41 per cent in January to 53 per cent in August, according to data from Twenty7tec. Three- and five-year fixes account for less than 35 per cent of searches, while those seeking longer than five years, typically 10 years, account for 12 per cent of searches, down from 23 per cent at the start of the year. In terms of actual recommendations sent by brokers to customers, an ESIS document showed that 50 per cent of recommendations in 2025 were for two-year fixes, compared with 45 per cent for five-year fixes. Last year, marginally more recommendations were five-year fixes.

Whether taking a two or five-year fix is the best move is debated, and given rate spikes of the past few years, borrowers are understandably keen to get the right advice. 'We are seeing a planned pivot back to shorter fixes,' said Nakita Moss, head of product at Twenty7tec. 'With rates easing and a huge wave of borrowers coming to the end of their five year Covid-era deals, many are choosing to keep their options open.' Nathan Reilly, commercial director at Twenty7tec, added: 'Advisers are in a crucial position right now. With so many clients coming off five year fixes, the conversation isn’t just about finding the lowest rate, it’s about balancing certainty with flexibility.'

Rates have gradually fallen for most of this year, but have seen small rises of late due to higher inflation readings and jitters on the financial markets. If mortgage rates rise more, as some predict, it could be better to lock in for five years now to avoid remortgaging more expensively in two years. The whistleblower believes brokers recommending two-year deals to most clients would be unwise. He told This is Money: brokers appear to be flogging two-year fixes to customers at a time when this is just incredibly risky advice. If mortgage rates go up again, this will mean more than half of all mortgage holders end up paying higher payments. 'I've been coming across brokers saying they have recommended all their customers take two-year fixes. Either brokers don’t understand how mortgages get priced, or perhaps more likely, they are doing it to get paid more.'