Biggest monthly reductions since October 2024
Mortgage rates have seen their biggest monthly reductions since October 2024, according to Moneyfacts UK Mortgage Trends Treasury Report data, but the market remains dependent on what might happen next.
Nathan Emerson, CEO at Propertymark, said: “Any fall in mortgage rates should help boost flexibility for both buyers and sellers, and it could perhaps be a sign that the UK housing market is overcoming what may be the worst of the mortgage rate rises witnessed in recent years.
“However, with inflation figures due next week, all eyes will likely turn to the Bank of England and its next base rate decision at the end of the month. There has been speculation that we may see a rate rise over the coming months, which could shift sentiment among lenders as the year progresses.” He said the appointment of a new Prime Minister could also create uncertainty.
The Moneyfacts data showed that average two- and five-year fixed rates fell by 0.16% and 0.11% respectively, with both reaching 5.52%, the lowest rate since the start of March 2026. Previously, the two-year average rate was priced higher than the five-year rate for three consecutive months (April to June).
The Moneyfacts Average New Mortgage Rate fell by 0.12%, to 5.47%, its biggest monthly fall since March 2025 (0.12%). It was last below 5% in March 2026 (4.90%).
Those borrowing with a limited deposit or equity of 5% have seen the average five-year fixed rate at 95% loan-to-value (LTV) dip below 6% for the first time since March 2026.
Mortgage availability improves
Meanwhile, mortgage availability increased for a third consecutive month, with 45 new deals now leading to 7,177 options, although there are still 307 fewer deals than at the start of March 2026.
Mortgage product churn is 14 days, one day shorter than the previous month as lenders have repriced deals amid moving swap rates.
For those needing to refinance, fixed rates are substantially lower than the average ‘revert to’ rate or Standard Variable Rate (SVR), which remains at 7.13%, down by 0.29% year-on-year from 7.42%. The highest SVR recorded was 8.19% during November and December 2023.
Rachel Springall, finance expert at Moneyfacts, said: “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.
“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.
