Average two- and five-year fixed rates drop to their lowest since March, with product choice rising for a third consecutive month
Fixed mortgage rates fell at their fastest monthly pace since October 2024 in June, according to the latest Moneyfacts UK Mortgage Trends Treasury Report.
The average two- and five-year fixed rates each declined to 5.52% — down by 0.16% and 0.11% respectively — marking their lowest levels since the start of March 2026.
The two-year fixed rate has stood above its five-year equivalent for three consecutive months from April to June, a phenomenon known as rate inversion. The narrowing gap between the two averages suggests the market may be returning to a more conventional pricing structure.
Borrowers with limited equity or a 5% deposit will also find conditions slightly more favourable. The average five-year fixed rate at 95% loan-to-value (LTV) fell below 6% for the first time since March 2026.
Product availability grew for a third successive month, with the total number of mortgage deals rising by 45 to 7,177. The market has continued to recover from the sharp withdrawals triggered by geopolitical instability in the Middle East earlier this year, though the total remains 307 deals below the start of March 2026.
Mortgage product churn held steady through June, with the average shelf-life of a deal at 14 days, one day shorter than in May, as lenders repriced in response to shifting swap rates.
The case for remortgaging remains compelling. The average standard variable rate (SVR) stands at 7.13%, compared with the average new fixed rate of 5.47%. The SVR is down 0.29 percentage points year-on-year from 7.42%, but remains well above a high of 8.19% recorded in November and December 2023.
| Mortgage market analysis | |||||||
| 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% | |
| Source: Moneyfacts Treasury Reports. Data shown is as at the first available day of the month, unless stated otherwise. | |||||||
"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," said Rachel Springall (pictured right), finance expert at Moneyfacts. "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%."
Springall noted that the last cuts of a comparable magnitude occurred in October 2024, when rates fell by 0.16% and 0.13% respectively. She added that while fixed rates had been inverted — with the two-year sitting above the five-year — for three consecutive months, that gap had begun to narrow. She cautioned, however, that renewed geopolitical tensions could yet slow the pace of rate reductions.
On product availability, Springall acknowledged that the recovery in choice had slowed in June, with only 45 deals added since the month's start. She pointed instead to the broader picture: 976 products had returned since the start of May, representing around three-quarters of the 1,283 deals withdrawn in April.
She also noted that the average shelf-life of a deal had stabilised at 14 days in June, up from a record low of eight days at the start of April, and that product count at 90% LTV had exceeded 900 options for the first time since March 2026.
"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," Springall said. "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."
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