Fixed mortgage rates in the UK have fallen at their fastest monthly pace since October 2024. Data for June published on 13 July showed the average two-year fixed rate dropping 0.16 percentage points to 5.52 percent, while the five-year equivalent eased 0.11 points to the same level.
This marks a notable shift. Lenders adjusted pricing after swap rates declined following a period of geopolitical uncertainty linked to events in the Middle East. The Moneyfacts average new mortgage rate fell 0.12 percentage points to 5.47 percent in July, the largest monthly decline since March 2025. Product availability also improved, rising by 45 to 7,177 options, with an average shelf life of 14 days.
The standard variable rate stood at 7.13 percent, down 0.29 points year on year. More encouraging still, the average five-year fixed rate for 95 percent loan-to-value dipped below 6 percent for the first time since March. As of 13 July, the two-year fixed sat at 5.46 percent and the five-year at 5.48 percent.
Reversing earlier spikes
Rates had climbed sharply earlier in the year. The average two-year fixed reached a low of 4.84 percent at the end of February before hitting 5.9 percent in early April. Compared with July 2024, when the two-year stood at 5.79 percent, the latest moves suggest a partial unwinding of pressure, though levels remain above the troughs seen before the spring spike.
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.
Rachel Springall, finance expert at Moneyfacts, pointed to the positive response from lenders to falling swap rates. She noted the last cuts of similar scale came in October 2024. The inversion between two- and five-year rates, which had persisted for three months, has begun to unwind, potentially returning pricing to a more traditional structure.
Yet the picture is not without risks. Springall warned that renewed escalation in geopolitical tensions could slow the tempo of further cuts. Nathan Emerson, chief executive at Propertymark, struck a similar note of cautious optimism.
