Biggest decline in mortgage rates since October 2024

Average two and five-year fixed rates now both 5.52%

Mortgage rates have seen their biggest monthly reductions since October 2024, according to Moneyfacts UK Mortgage Trends Treasury Report data.

It 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 This equates to around three-quarters (76%) of mortgage deals coming back of the 1,283 products withdrawn in April.

“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.”