There has been a surge in three-year fixed rate mortgages with number of deals on the market rising 16% in the last two years.
Three-year fixes are increasingly popular as they combine the "perfect mix of security and a great rate", according to Moneyfacts.co.uk.
Charlotte Nelson, finance expert at the site, said increased competition has forced lenders to branch out to attract the attention of borrowers.
“This has resulted in a recent boom in three-year fixed rate mortgages, as well as a marked drop in the average three-year rate to the lowest on record.”
In April 2014 there were 442 three-year fixes on the market, today borrowers can choose from 524.
Nelson said that many borrowers want to benefit from the market’s record low rates but are wary of locking into a deal for five or more years in case their situation changes.
“A three-year deal, which sits comfortably in the middle of two and five-year options, is a good compromise.”
Nelson said there was very little to choose between a two-year fixed rate and a three-year deal in terms of rate.
“The difference between the average two-year and three-year fix at 60% LTV is just 0.22%, or £21.54 a month.”
Nelson said three-year fixed rates often get pushed to the wayside in favour of a two or five-year deal.
“But borrowers today should not overlook this option as they could be missing out on some great deals.”