Editor's note: This brief was summarised by The Property AI Newsroom from a report by The Negotiator. Read the original article for full details.
Fixed Mortgage Rates See Largest Drop Since October 2024
Fixed mortgage rates in the UK have experienced their steepest monthly decline since October 2024, according to Moneyfacts data reported by The Negotiator. The average two- and five-year fixed rates at the start of July both fell to 5.52%, marking their lowest point since March 2026.
Moneyfacts data shows the average two-year fixed rate dropped by 0.16 percentage points, while the five-year fixed rate fell by 0.11 percentage points. Mortgage availability also improved for the third consecutive month, with the number of products rising by 45 to a total of 7,177 options.
For buyers with a 60% loan-to-value (LTV), the average two-year fixed rate has fallen below 5% to 4.97%, down from 5.17% in June. The average five-year fixed rate at this LTV dropped from 5.29% to 5.23%. Those with a 5% deposit or equity can also access lower rates, with the average five-year fixed rate at 95% LTV now at 5.92%, and the two-year fix at 95% LTV dropping from 6.23% to 6.13%.
Despite these improvements, Moneyfacts notes there are still 307 fewer mortgage deals available compared to the start of March 2026. Additionally, the average shelf-life of a mortgage deal in June was 14 days, one day less than in May, indicating continued product churn.
Market Uncertainty Remains
The Negotiator reports that while the drop in rates offers temporary relief for borrowers, uncertainty remains in the mortgage market. Factors such as upcoming inflation figures, the Bank of England's next base rate decision, and the appointment of a new Prime Minister could all impact future mortgage rates and housing market sentiment.
Letting agents and inventory clerks should note that increased mortgage product choice and lower rates may encourage more buyers to enter the market, but ongoing economic and political developments could influence demand and transaction volumes in the coming months.
Source: The Negotiator