According to Moneyfacts figures, while there was a decline in mortgage product choice between June and July, compared to last year, mortgage product choice is up from 6,657 options.
The average shelf life has been improving, standing at 17 days in July, which is an increase from 16 days the month before. It is also in line with last year’s figures and up from 13 days two years ago.
The report found that the average mortgage rates for two- and five-year fixed rates decreased by 0.08% and 0.07% to 5.01% for both.
Moneyfacts said the average two- and five-year fixed rates were previously lower in September 2022, at 4.24%, and May 2023, when pricing stood at 4.97%. These were the last times that the average mortgage rate was sub-5%.
The average two-year tracker variable mortgage rate remained unchanged at 4.91%.
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The average standard variable rate (SVR) remained at 7.42%. In comparison, the highest recorded was 8.19% during November and December 2023.
| Mortgage market analysis | ||||||
| Aug 2023 | Aug 2024 | Feb 2025 | Jul 2025 | Aug 2025 | ||
| Fixed and variable rate products | Total product count – all LTVs | 5,056 | 6,657 | 6,451 | 6,908 | 6,842 |
| Product count – 95% LTV | 226 | 353 | 388 | 447 | 442 | |
| Product count – 90% LTV | 586 | 758 | 760 | 856 | 882 | |
| Product count – 60% LTV | 513 | 755 | 741 | 800 | 781 | |
| All products | Shelf life (days) | 13 | 17 | 36 | 16 | 17 |
| All LTVs | Average two-year fixed rate | 6.85% | 5.77% | 5.52% | 5.09% | 5.01% |
| Average five-year fixed rate | 6.37% | 5.38% | 5.32% | 5.08% | 5.01% | |
| 95% LTV | Average two-year fixed rate | 7.1% | 6.17% | 5.94% | 5.54% | 5.48% |
| Average five-year fixed rate | 6.41% | 5.67% | 5.72% | 5.5% | 5.42% | |
| 90% LTV | Average two-year fixed rate | 6.81% | 5.98% | 5.8% | 5.32% | 5.33% |
| Average five-year fixed rate | 6.23% | 5.47% | 5.47% | 5.17% | 5.19% | |
| 60% LTV | Average two-year fixed rate | 6.62% | 5.25% | 4.98% | 4.57% | 4.46% |
| Average five-year fixed rate | 6.16% | 4.88% | 4.77% | 4.68% | 4.59% | |
| All LTVs | Standard variable rate (SVR) | 7.85% | 8.16% | 7.78% | 7.42% | 7.42% |
| All LTVs | Average two-year tracker rate | 6.02% | 5.95% | 5.46% | 4.91% | 4.91% |
| Data shown is as at the first available day of the month, unless stated otherwise. | ||||||
| Source: Moneyfacts Treasury Reports | ||||||
‘Essential’ that borrowers seek advice
Rachel Springall, finance expert at Moneyfacts, said the figures showed that lenders had “mixed attitudes to pricing” during July, and the “churn of products” resulted in a dip in choice, cancelling out the previous month’s rise.
She continued: “In spite of the perhaps cautious approach, rate cuts prevailed to push the Moneyfacts Average Mortgage Rate down to 5.04% at the start of this month, edging ever so closer to dipping below 5%. Breaking down into fixed rate moves over the past six months shows where the bigger margins are being shaved off by lenders, with the average two-year rate dropping by 0.51% versus just 0.31% cut off the five-year rate.
“However, the movement to swap rates has shown a shift back to a more traditional market, where five-year deals were known to cost extra. Such rate inversion has occurred for almost three years, starting in response to the mini Budget in September 2022.”
Springall noted that as it stands, lenders may well consider a “more low and slow approach” to making cuts over the next few weeks, because of the “knife-edge base rate decision” last week, which led to a rise in swap rates.
“Piling on to this, the markets could react badly to any significant decisions made in the Autumn Budget, an event [that] can be a blessing or a curse for future rate setting. If inflation gets out of control or economic uncertainties spike, borrowers can forget about more base rate cuts by the Bank of England this year.
“It has now been two years since the average two-year fixed mortgage rate hit a 15-year high, as lenders frantically repriced their deals [and] the average shelf life of a mortgage was just 13 days. Lenders are still churning their ranges today, albeit with a shelf-life of 17 days, but such repricing is to the benefit of borrowers.
“The incentive to refinance today onto a fixed deal is much more critical, as there is now a significant difference of more than 2% to escape a revert rate, compared to just 1% back in August 2023, based on the average two-year fixed rate versus the average SVR,” she said.
Springall continued on to say that borrowers looking for a 90% loan-to-value (LTV) deal would be pleased, as there was an uptick in product choice month-on-month, but added that the average rates rose, albeit at small margins.
“First-time buyers who have a small deposit of 5% will find product choice hasn’t surged as they might have hoped after the government replaced the mortgage guarantee scheme in July, but in good news, there has been a drop to fixed rates.
“However, the big difference to first-time buyers and those borrowing at higher LTVs as the year progresses will be the changes to the loan-to-income (LTI) rules. Lenders would be wise to do as much as they can to support new buyers, and it remains essential borrowers seek advice to navigate the mortgage maze,” she added.
