Whistleblower claims some mortgage brokers push two-year fixes to boost commissions amid shifting demand for short-term deals

A whistleblower at a major mortgage lender claims that certain brokers are steering borrowers toward two-year fixed-rate deals to boost commissions, even when longer terms might better fit a customer's circumstances. The allegations, made to This is Money on condition of anonymity, come as fresh industry data show a decisive tilt away from long-term fixed mortgages and toward shorter fixes.

New data from Twenty7tec show a clear shift in consumer and broker behavior. Searches for two-year fixed rates rose from 41 per cent in January to 53 per cent in August, indicating a growing appetite for shorter-term protection as rates have fluctuated in recent years. Three- and five-year fixes account for less than 35 per cent of searches, and fixes longer than five years—typically 10-year deals—have fallen to 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—captured in documents known as European Standardised Information Sheets (ESIS)—two-year fixes accounted for about 50 per cent in 2025, up from 45 per cent for five-year fixes. By contrast, last year saw slightly more recommendations for five-year fixes than for two-year deals.

The whistleblower told This is Money that some brokers are actively recommending two-year deals to most clients to secure higher commissions. He cautioned that whether a two-year or five-year fix is the best move depends on individual circumstances and evolving rate expectations, but argued that current incentives may skew advice when markets are uncertain. "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 getting screwed all over again," he said. "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, more likely, they are doing it to get paid more."

Proponents of shorter fixes say the economics of today support more frequent reviews. Nakita Moss, head of product at Twenty7tec, described a market in which rate declines have encouraged borrowers approaching the end of five-year deals to keep options open. "We are seeing a planned pivot back to shorter fixes, with rates easing and a huge wave of borrowers coming to the end of their five-year Covid-era deals," she said. Nathan Reilly, Twenty7tec’s commercial director, added that advisers labor in a pivotal moment: "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."

Industry voices have pointed to genuine price incentives behind the trend. Brokers say two-year fixes can temporarily be cheaper than five-year fixes, a factor reflected in market data: Moneyfacts shows two-year fixes at about 4.98 per cent on average, versus 5.02 per cent for five-year fixes. While some brokers emphasize price, others insist that the choice must reflect borrowers’ plans to move or remortgage before a longer term ends. Aaron Strutt of Trinity Financial and Nicholas Mendes of John Charcol both said the current environment makes shorter fixes attractive for many borrowers, but they stressed that good advice still hinges on individual needs and expectations about future rates.

What do regulators say? The Financial Conduct Authority (FCA) has acknowledged the whistleblower’s concerns and reiterated its expectations for brokers to act in borrowers’ best interests. The FCA said mortgage brokers must consider customers’ needs, circumstances, and financial objectives, including how long to fix payments. It noted that the new Consumer Duty, established in 2023, requires brokers to provide clear information and products that are right for clients. In a letter to chief executives earlier this year, the FCA said lenders should do more to ensure customers have considered their options and that advice reflects personal financial circumstances.

The broader market backdrop remains nuanced. Mortgage rates have trended downward for much of the past two years, but there is no consensus about how rates will move in the near term. Bank of England Governor Andrew Bailey recently warned of greater uncertainty around future rate cuts, even as policymakers signaled they still expect rates to ease at some point. The Bank cut its benchmark rate from 4.25 per cent to 4.0 per cent last month, but investors do not expect another quarter-point cut until next year. In the mortgage market, pricing continues to be shaped by Sonia swap rates, which inform lenders’ fixed-rate pricing. Two-year Sonia swaps recently stood around 3.69 per cent, with five-year swaps near 3.73 per cent, leaving only a slim margin over the Bank of England base rate of 4 per cent. Analysts note that if expectations for future rate cuts shift, mortgage pricing could adjust, but the current path suggests fixed-rate offers may not move dramatically lower in the near term.

Some lenders have already nudged rates higher. Hina Bhudia, a partner at Knight Frank Finance, pointed to small, but meaningful, rate increases that can raise monthly payments for borrowers at a time when other financial pressures are mounting. She said even modest moves matter for households already stretched by tax changes and changes to property-related costs. Against this backdrop, the whistleblower argues for structural reform in how brokers are compensated. He contends that commissions should not be tied to a single product, noting that under FCA rules brokers are paid the same whether they sell two-, three-, five-, ten-, or 25-year fixes. He also advocates moving to an annual commission model based on whether the loan remains with the lender, a shift he argues would encourage more rational product recommendations rather than quick wins.

Some brokers defend the status quo by underscoring genuine price differentials and the appeal of flexibility. They note that two-year fixes are often cheaper than longer-term options and can help borrowers manage risk should their circumstances change, such as a move or a job change. The FCA has acknowledged these dynamics and emphasised that product recommendations should reflect customers’ financial needs and plans, not just the prospect of a quick payout. For borrowers weighing options, industry guidance remains that comparing deals, consulting with a trusted broker, and acting before a rate lock expires can help secure favorable terms. In addition, lenders and brokers commonly offer options to lock in a rate in advance, sometimes with a fee that can be rolled into the loan, allowing borrowers to secure a rate while they finalize their decisions.

For readers considering a remortgage or a home purchase, the advice remains practical and cautious. Borrowers should compare rates broadly, engage with a broker who understands their personal situation, and plan ahead to avoid being caught by last-minute rate spikes. Locking in six to nine months before a fixed-rate deal ends is a common strategy, and some deals permit adding fees to the mortgage without incurring immediate out-of-pocket costs. Those buying a home should apply the same caution, mindful that higher mortgage payments can reduce buying power if house prices prove less forgiving in the coming months. Buy-to-let investors should also act early, as rate changes can have outsized effects on long-term financing.

This is Money’s whistleblower case highlights a tension at the heart of the mortgage market: how to balance the incentive structures that guide broker recommendations with the core duty to place borrowers in products that fit their needs. Regulators say the onus is on lenders and brokers to ensure options are clearly presented and that advice reflects each borrower’s financial picture. As the market continues to evolve, industry stakeholders say the best guardrails will come from transparent pricing, robust disclosures, and a renewed focus on the long-term affordability and stability of home financing for households across the country.