Last month saw fixed mortgage rates record their biggest monthly reductions since October 2024, according to the latest Moneyfacts UK Mortgage Trends Treasury Report.
The average two-year fixed mortgage rate fell by 0.16 percentage points to 5.52%, while the average five-year fixed rate dropped by 0.11 percentage points to the same level. Both are at their lowest since the start of March 2026.
Moneyfacts said average two-year fixed rates had been priced higher than five-year rates for three consecutive months, from April to June, although June’s reductions had begun to narrow that gap.
The average rate for new mortgages also fell by 0.12 percentage points to 5.47%, matching its biggest monthly decline since March 2025.
Borrowers with a 5% deposit also benefited from lower pricing, with the average five-year fixed rate at 95% loan-to-value falling below 6% for the first time since March 2026.
Mortgage availability increased for a third consecutive month, with the number of products rising by 45 to 7,177. The market continued to recover following widespread product withdrawals earlier in the year, although there were still 307 fewer deals available than at the start of March.
The average shelf-life of a mortgage product fell from 15 days to 14 days during June as lenders continued to reprice deals in response to movements in swap rates.
Rachel Springall, finance expert at Moneyfacts, said borrowers would “breathe a sigh of relief” at the pace of recent mortgage rate reductions.
However, she warned that the “positive trajectory could be thrown off course, as renewed escalation in geopolitical tensions could slow the tempo of mortgage rate cuts”.
Nathan Emerson, CEO at Propertymark, commented: “Any fall in mortgage rates should help boost flexibility for both buyers and sellers, and it could perhaps be a sign that the UK housing market is overcoming what may be the worst of the mortgage rate rises witnessed in recent years.
“However, with inflation figures due next week, all eyes will likely turn to the Bank of England and its next base rate decision at the end of the month.
“There has been speculation that we may see a rate rise over the coming months, which could shift sentiment among lenders as the year progresses.”
Emerson added that the appointment of a new prime minister could create uncertainty among buyers and sellers due to potential changes in housing policy going forward.
“So, while the news is welcome, it is important to consider the wider economic picture and the many different scenarios that could play out over the coming weeks and months,” he said.
