According to Moneyfacts, the average mortgage rates for overall two- and five-year fixed rates fell by 0.03% and 0.01% to 5.09% and 5.08% respectively between June and July.
The report said that the average two- and five-year fixed rates were previously lower in September 2022 and October 2024 respectively, coming to 4.24% and 5.07% apiece.
Moneyfacts continued that the margin between the average two-year fixed rate and five-year fixed rate equivalent is at its smallest since rates inverted in October 2022.
The average shelf-life of a mortgage product came to 16 days, which compares to 17 days a month ago. This is its lowest count since March 2025 when shelf life was estimated at 16 days.
Product choice also overall rose month-on-month, to 6,908 options, up from 6,658 this time last year. This was last higher in October 2007 at 7,421 products.
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The average two-year tracker variable mortgage rate remained unchanged at 4.91%.
The average standard variable rate fell to 7.42%. In comparison, the highest recorded was 8.19% during November and December 2023.
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Mortgage market analysis |
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|
Jul-23 |
Jul-24 |
Jan-25 |
Jun-25 |
Jul-25 |
||
|
Fixed and variable rate products |
Total product count – all LTVs |
4,396 |
6,658 |
6,508 |
6,843 |
6,908 |
|
Product count – 95% LTV |
188 |
361 |
366 |
453 |
447 |
|
|
Product count – 90% LTV |
525 |
792 |
759 |
873 |
856 |
|
|
Product count – 60% LTV |
511 |
741 |
780 |
793 |
800 |
|
|
All products |
Shelf-life (days) |
12 |
30 |
21 |
17 |
16 |
|
All LTVs |
Average two-year fixed rate |
6.41% |
5.95% |
5.48% |
5.12% |
5.09% |
|
Average five-year fixed rate |
5.97% |
5.53% |
5.25% |
5.09% |
5.08% |
|
|
95% LTV |
Average two-year fixed rate |
6.80% |
6.26% |
5.86% |
5.57% |
5.54% |
|
Average five-year fixed rate |
6.01% |
5.78% |
5.47% |
5.52% |
5.50% |
|
|
90% LTV |
Average two-year fixed rate |
6.39% |
6.18% |
5.75% |
5.38% |
5.32% |
|
Average five-year fixed rate |
5.81% |
5.64% |
5.36% |
5.21% |
5.17% |
|
|
60% LTV |
Average two-year fixed rate |
6.15% |
5.45% |
4.96% |
4.58% |
4.57% |
|
Average five-year fixed rate |
5.74% |
5.06% |
4.79% |
4.65% |
4.68% |
|
|
All LTVs |
Standard Variable Rate (SVR) |
7.67% |
8.17% |
7.81% |
7.48% |
7.42% |
|
All LTVs |
Average two-year tracker rate |
5.96% |
5.94% |
5.47% |
4.91% |
4.91% |
Improved mortgage rates and stress tests is boon to borrowers refinancing
Rachel Springall, finance expert at Moneyfacts, said that fixed mortgage rates have “continued on their downward trend, which will delight the millions of borrowers due to refinance this year”.
She continued that lenders have also been relaxing their stress test rules, which would “further boost affordability”.
“The repricing momentum from lenders was rife in June, leading to another fall in the average shelf-life of a deal to 16 days. However, the intensity of fixed rate cuts calmed, seeing the average two- and five-year fixed rates drop by 0.03% and 0.01%, respectively.
“A deeper dive into the loan-to-value (LTV) sectors also revealed the average five-year fixed rate at 60% loan-to-value rose, and with the five-year fixed rate dropping by just 0.01%, it may raise concerns over the diverging path of longer-term fixed rates,” Springall added.
She continued that there were expectations for fixed rates to “heat up this summer across the spectrum, fuelled by swap rate volatility”.
“The mortgage market has shown how far it has improved over recent years, as borrowers who locked into a two-year fixed rate deal back in July 2023 would have been paying 6.41% in interest on average, compared to 5.09% now. That is a difference of £199 per month in repayments on a £250,000 mortgage over 25 years,” Springall noted.
She continued that the growth in “overall product availability creates a positive sentiment and reaffirms the more calming churn of mortgage ranges by lenders”.
“This stance is far beyond the upheaval endured by the mortgage market two years ago, when there was a drop of 571 products between the start of June and July 2023, the biggest plummet since the ‘mini-Budget’ which caused unprecedented chaos around both product choice and mortgage interest rates.
“Borrowers will not want to see a repeat of such upheaval, especially first-time buyers. Those worried about the end of the Mortgage Guarantee Scheme will find negligible impact in the choice of mortgages at higher LTVs, and the government is due to announce a new replacement this month,” Springall said.
She said that while relaxation in stress tests underway there is still no news on changing the loan-to-income (LTI) rules.
“There needs to be more progress to support first-time buyers, who remain the lifeblood of the mortgage market and to get mortgage prisoners switching deals. It is essential borrowers seek advice to navigate the latest deals available to them,” Springall concluded.
