According to data from the Moneyfacts UK Mortgage Trends Treasury report, the average two- and five-year fixed rates fell by 0.16% and 0.11% respectively, both settling at 5.52%. These were the lowest rates since March this year and the largest cuts seen since October 2024.
The reductions also reversed the three-month trend of the average two-year rate being higher than the typical five-year rate, which occurred from April to June.
Further, the average new mortgage rate dropped by 0.12% to 5.47%, the largest reduction since March last year.
Mortgage pricing improved notably for borrowers with a 5% deposit of equity, with the average five-year fixed rate at 95% loan to value (LTV) falling below 6% for the first time since March.
This came to 5.92%, down from 6.02% last month, while the average two-year fixed rate at the same tier dropped from 6.23% to 6.13%.
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At 60% LTV, the average two-year fixed rate fell back below 5%, from 5.17% in June to 4.97% in July. Meanwhile, the typical five-year fixed rate declined from 5.29% to 5.23%.
The typical standard variable rate (SVR) was unchanged at 7.13%, while the average two-year tracker rate rose slightly from 4.48% to 4.49%.
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Mortgage market analysis |
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Jul 2024 |
Jul 2025 |
Jan 2026 |
Jun 2026 |
Jul 2026 |
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|
Fixed and variable rate products |
Total product count – all LTVs |
6,658 |
6,908 |
7,158 |
7,132 |
7,177 |
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Product count – 95% LTV |
361 |
447 |
489 |
466 |
450 |
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|
Product count – 90% LTV |
792 |
856 |
927 |
891 |
913 |
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|
Product count – 60% LTV |
741 |
800 |
809 |
810 |
835 |
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All products |
Shelf life (days) |
30 |
16 |
21 |
15 |
14 |
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All LTVs |
Average two-year fixed rate |
5.95% |
5.09% |
4.83% |
5.68% |
5.52% |
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Average five-year fixed rate |
5.53% |
5.08% |
4.91% |
5.63% |
5.52% |
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|
95% LTV |
Average two-year fixed rate |
6.26% |
5.54% |
5.29% |
6.23% |
6.13% |
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Average five-year fixed rate |
5.78% |
5.5% |
5.33% |
6.02% |
5.92% |
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90% LTV |
Average two-year fixed rate |
6.18% |
5.32% |
5.09% |
5.94% |
5.76% |
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Average five-year fixed rate |
5.64% |
5.17% |
5.07% |
5.73% |
5.6% |
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60% LTV |
Average two-year fixed rate |
5.45% |
4.57% |
4.28% |
5.17% |
4.97% |
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Average five-year fixed rate |
5.06% |
4.68% |
4.56% |
5.29% |
5.23% |
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All LTVs |
SVR |
8.17% |
7.42% |
7.25% |
7.13% |
7.13% |
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All LTVs |
Average two-year tracker rate |
5.94% |
4.91% |
4.44% |
4.48% |
4.49% |
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Data shown is as at the first available day of the month, unless stated otherwise. |
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Source: Moneyfacts Treasury Reports |
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More mortgages on the market
Mortgage product choice rose from 7,132 in June to 7,177 in July, higher than the product count of 7,158 seen at the start of the year.
There was a decline in options for borrowers in need of a 95% mortgage, as this fell from 466 to 450 deals.
At 90% LTV, the product count increased from 891 to 913, while the number of mortgages available at 60% LTV rose from 810 to 835.
The number of days a mortgage stayed on the market was relatively stable at 14 days, just a day shorter than the average shelf life in June. Still, this was notably shorter than the average shelf life of 21 days seen in January.
Relief for borrowers
Rachel Springall, finance expert at Moneyfacts, said borrowers would “breathe a sigh of relief” at mortgage rates falling and the calmer period of product churn and increased choice, as “lenders responded positively to falling swap rates in June”.
She added: “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.”
Springall said the combined addition of 976 mortgages since the start of May “calls for celebration”, adding: “This equates to around three-quarters 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 time frame compared to the record low of eight days recorded at the start of April.”
Springall said: “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.”
Springall said that despite ongoing affordability pressures, a recent study from Yorkshire Building Society found that 88% of adults in the UK felt homeownership was important.
She said it was therefore “vital” that lenders continued to create innovative products and relax criteria to support first-time buyers.
