According to Moneyfacts daily figures, the average two-year fixed rate is down from 5% the previous working day.
The last time the average two-year fixed rate was below 5% was on 29 September 2022, when it stood at 4.87%.
Moneyfacts added that the average five-year fixed residential mortgage rate is 5% today. This is a drop from 5.01% the previous working day.
The report said there are currently 6,957 residential mortgage products available. This is unchanged from the previous working day.
Earlier this week, Moneyfacts had reported that mortgage product choice had fallen month-on-month in July, but product choice was up on last year and shelf life was improving.
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On the buy-to-let (BTL) side, the average two-year BTL residential mortgage rate comes to 4.9%. This is unchanged from the previous working day.
The average five-year BTL residential mortgage rate is priced at 5.23%. This is also unchanged from the previous working day.
Moneyfacts said there are currently 4,591 BTL mortgage products available, in line with the previous working day.
The report added that the average two-year tracker rate is 4.67%. This is slightly down from 4.68% the previous working day.
The average standard variable rate (SVR) as of 1 August 2025 is 7.42%.
Adam French, head of news at Moneyfactscompare.co.uk, said: “Average two-year fixed mortgage rates dipping below 5% for the first time since the Liz Truss mini Budget in 2022 is a symbolic turning point. While the cost of borrowing is still well above the rock-bottom rates of the years immediately preceding that fiscal event, this milestone shows lenders are competing more aggressively for business.
“However, while mortgage rates have followed the mood music set by successive cuts to the Bank of England base rate, homeowners and first-time buyers may have to wait longer for more substantial cuts. Inflation is forecast to spike at 4% in the autumn and not return to its 2% target until 2027 or beyond, which is likely to mean the base rate will hold around its current level for longer.”
