Fixed mortgage rates dropped for a consecutive month, citing the biggest monthly reductions since October 2024, Moneyfacts data reveals.
The latest figures show that the average two- and five-year fixed rates fell by 0.16% and 0.11% respectively, with both reaching 5.52%, their lowest points since the start of March 2026.
The downward trend edges the rates away from inversion, where the two-year average rate has been priced higher than the five-year rate for three consecutive months in April through to June.
The Moneyfacts average new mortgage rate fell by 0.12%, to 5.47%, its biggest monthly fall since March 2025 where it also dropped by 0.12%.
It was last below 5% earlier this year in March when it stood at 4.90%.
Meanwhile, the average five-year fixed rate at 95% loan-to-value (LTV) has dipped below 6% for the first time since March this year.
Data also shows that mortgage availability increased for a third consecutive month, with product choice rising by 45 deals to 7,177 options.
While Moneyfacts says 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.
The average shelf-life of a deal now stands at 14 days, one day fewer than the month prior.
Moneyfacts suggests the incentive to remortgage remains strong, with fixed rates much lower than the average ‘revert to’ rate or standard variable rate.
The average SVR remains at 7.13%, down by 0.29% year-on-year from 7.42%.
Moneyfacts finance expert Rachel Springall says: “Borrowers will breathe a sigh of relief to see fixed mortgages falling at their fastest pace for almost two years, combined with a calmer period of product churn and an uplift in choice.”
“Lenders responded positively to falling swap rates in June, seeing notable drops to the average two- and five-year fixed rates by 0.16% and 0.11% respectively, both settling at 5.52%. The last cuts of a similar scale came in October 2024, when the rates dropped by 0.16% and 0.13% respectively.”
“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.”
“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%) 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 timeframe compared to the record low of eight days recorded at the start of April.”
“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 (5,848).”
