Mortgage rates fall at fastest pace in almost two years
- By editor
- 8 hours ago
- 2 min read
The Moneyfacts UK Mortgage Trends Treasury Report data has revealed that fixed mortgage rates have recorded their biggest monthly reductions since October 2024.
The average two-and five-year fixed rates fell by 0.16 and 0.11 per cent respectively, with both reaching 5.52 per cent, their lowest points since the start of March 2026.
The data also showed that borrowers with a limited deposit or equity of just five per cent will find rates lower month-on-month. The average five-year fixed rate at 95 per cent loan-to-value (LTV) has dipped below six per cent for the first time since March 2026.
Mortgage availability increased for a third consecutive month, with product choice rising by 45 deals to 7,177 options. The market continued its recovery from the severe withdrawals caused by unsettled markets due to the conflict in the Middle East. There are still 307 fewer deals compared to the start of March 2026.
Rachel Springall, finance expert at Moneyfacts commented: “Borrowers will breathe a sigh of relief to see fixed mortgages falling at their fastest pace for almost two years.
“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 This equates to around three-quarters (76 per cent) of mortgage deals coming back of the 1,283 products withdrawn in April.
“Borrowers with just a small deposit or equity of 10 per cent may be pleased to know that further recovery of product choice at 90 per cent 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 five per cent deposit; these deals make up just eight per cent of the core market (5,848).”
She added: “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.
“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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