Moneyfacts UK Mortgage Trends Treasury Report data reveals fixed mortgage rates have recorded their biggest monthly reductions since October 2024. Product choice rose, and the churn of mortgage deals was stable.
Fixed mortgage rates fell for a second consecutive month, recording the biggest monthly reductions since October 2024. The average two-year fixed rate dropped by 0.16% and the average five-year fixed rate by 0.11%, leaving both at 5.52% – their lowest level since the start of March 2026. This continued decline has also narrowed the recent rate inversion, after the average two-year rate had been priced higher than the five-year rate for three consecutive months between April and June.
Meanwhile, the Moneyfacts Average New Mortgage Rate fell by 0.12% to 5.47%, marking its largest monthly decline since March 2025. However, it remains above the last sub-5% reading of 4.90%, recorded in March 2026.
Borrowers with smaller deposits also benefited, with rates falling across the 95% loan-to-value (LTV) market. The average five-year fixed rate at 95% LTV dipped below 6% for the first time since March 2026, providing some welcome relief for those with limited deposits or equity.
Mortgage availability continued to improve, with product choice increasing for a third consecutive month by 45 deals to 7,177. While the market has continued to recover from the disruption caused by conflict in the Middle East, there are still 307 fewer mortgage products available than at the start of March 2026.
Product churn remained high throughout June, with the average shelf-life of a mortgage deal falling to 14 days, one day shorter than the previous month. Lenders continued to reprice products in response to changing swap rates.
The incentive to remortgage also remains strong, with fixed mortgage rates significantly lower than the average Standard Variable Rate (SVR). The average SVR now stands at 7.13%, down from 7.42% a year ago and below the recent peak of 8.19% recorded in November and December 2023.
“Borrowers will breathe a sigh of relief to see fixed mortgages falling at their fastest pace for almost two years, combined with a calmer period of product churn and an uplift in choice. Lenders responded positively to falling swap rates in June, seeing notable drops to the average two- and five-year fixed rates by 0.16% and 0.11% respectively, both settling at 5.52%. The last cuts of a similar scale came in October 2024, when the rates dropped by 0.16% and 0.13% respectively.
It has been three months since fixed rates inverted, where the two-year fixed has been higher than its five-year counterpart. However, this has started to unwind, so the rates should hopefully start to fall back into a more traditional pricing structure. However, this positive trajectory could be thrown off course, as renewed escalation in geopolitical tensions could slow the tempo of mortgage rate cuts.
Mortgage product choice recovery from the steep drops seen back in April may have slowed, with an uplift of 45 options since the beginning of June, but it is the combined total of 976 deals returning since the start of May that calls for celebration. This equates to around three-quarters (76%) of mortgage deals coming back of the 1,283 products withdrawn in April. Stability appeared to be a recurring theme during June, with the average shelf-life of a deal recorded at 14 days, from 15 days the month before.
This is a much more acceptable timeframe compared to the record low of eight days recorded at the start of April. Borrowers with just a small deposit or equity of 10% may be pleased to know that further recovery of product choice at 90% LTV has surpassed 900 options for the first time since the start of March 2026. However, there is still room for improvement across the higher LTV terms, particularly for borrowers who can only amass a 5% deposit; these deals make up just 8% of the core market (5,848).
Despite ongoing affordability pressures in the mortgage market, a recent study from Yorkshire Building Society revealed that 88% of UK adults felt homeownership is important. Therefore, it is vital that lenders continue to create innovative products and relax criteria carefully to support first-time buyers, as they remain the lifeblood of the mortgage market. Buyer confidence may well remain subdued until the supply of affordable housing improves this year, but for now, mortgage costs are not expected to rapidly escalate.
However, there are other ways to reduce the costs of buying a home and stimulate the housing market, such as adjusting the nil-rate bands threshold for Stamp Duty Land Tax (SDLT) for first-time buyers. Seeking advice in the first instance to understand costs and to navigate the mortgage maze is vital, as headline-grabbing low-rate deals might not always be the best choice.”
Rachel Springall, Finance Expert at Moneyfacts
Mortgage market analysis |
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| Jul-24 | Jul-25 | Jan-26 | Jun-26 | Jul-26 | ||
| Fixed and variable rate products | Total product count – all LTVs | 6,658 | 6,908 | 7,158 | 7,132 | 7,177 |
| Product count – 95% LTV | 361 | 447 | 489 | 466 | 450 | |
| Product count – 90% LTV | 792 | 856 | 927 | 891 | 913 | |
| Product count – 60% LTV | 741 | 800 | 809 | 810 | 835 | |
| All products | Shelf-life (days) | 30 | 16 | 21 | 15 | 14 |
| All LTVs | Average two-year fixed rate | 5.95% | 5.09% | 4.83% | 5.68% | 5.52% |
| Average five-year fixed rate | 5.53% | 5.08% | 4.91% | 5.63% | 5.52% | |
| 95% LTV | Average two-year fixed rate | 6.26% | 5.54% | 5.29% | 6.23% | 6.13% |
| Average five-year fixed rate | 5.78% | 5.50% | 5.33% | 6.02% | 5.92% | |
| 90% LTV | Average two-year fixed rate | 6.18% | 5.32% | 5.09% | 5.94% | 5.76% |
| Average five-year fixed rate | 5.64% | 5.17% | 5.07% | 5.73% | 5.60% | |
| 60% LTV | Average two-year fixed rate | 5.45% | 4.57% | 4.28% | 5.17% | 4.97% |
| Average five-year fixed rate | 5.06% | 4.68% | 4.56% | 5.29% | 5.23% | |
| All LTVs | Standard Variable Rate (SVR) | 8.17% | 7.42% | 7.25% | 7.13% | 7.13% |
| All LTVs | Average two-year tracker rate | 5.94% | 4.91% | 4.44% | 4.48% | 4.49% |
| Data shown is as at the first available day of the month, unless stated otherwise. | ||||||
| Source: Moneyfacts Treasury Reports | ||||||
| Moneyfacts Average New Mortgage Rate | |||||
| Jul-24 | Jul-25 | Jan-26 | Jun-26 | Jul-26 | |
| Moneyfacts AverageNew Mortgage Rate | 5.80% | 5.11% | 4.87% | 5.59% | 5.47% |
| Calculated from the total of all on-sale, core market, fixed and variable tracker mortgages. Standard exclusions apply: Self-build only, shared ownership only, new build only, shared equity only, standard variable rates and adverse credit | |||||
| Source: Moneyfacts Average New Mortgage Rate. | |||||