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July sees rate cuts wiped out

ended 10. August 2026

New data in from Moneyfacts below. Any thoughts, ASAP please as story being written now.

  • Lenders moved to increase mortgage rates during July amid rising swap rates, due to a resurgence of unrest in the Middle East, fuelling inflationary fears.
  • The Moneyfacts Average New Mortgage Rate rose by 0.12%, from 5.47% in July to 5.59% at the start of August, reversing the prior monthly cut. The rate had fallen by 0.12% from 5.59% in June. The rate was last below 5% in March 2026 (4.90%).
  • Fixed rates rose month-on-month for the first time since April, with the average two- and five-year fixed rates rising by 0.11% and 0.14% respectively, to 5.63% and 5.66%.
  • Mortgage product churn continued throughout July, the average shelf-life of a deal fell to 11 days, three days less than the month prior, the lowest since April 2026 (eight days).
  • Mortgage availability remains strong; for a fourth consecutive month, product choice rose, this month by 180 deals to 7,357. The recovery of choice means that 90% of deals withdrawn between March and April have returned.
  • Borrowers with a limited deposit or equity of just 5% will find the average five-year fixed rate at 95% loan-to-value (LTV) rose above 6%.
  • The incentive to remortgage remains strong, with fixed rates much lower than the average ‘revert to’ rate or Standard Variable Rate (SVR). The average SVR remains at 7.13%, down by 0.29% year-on-year from 7.42%. The highest recorded was 8.19% during November and December 2023.

6 responses from the Newspage community

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Matt Coulson
Founder at Heron Financial Ltd
July basically undid June. The average new rate is up 0.12%, which is exactly what came off the month before, so a lot of borrowers are back where they started after a month of noise. It's worth being clear about what's driving it: this is swap rates reacting to the Middle East and the oil price, rather than the Bank of England changing course. Moves like that can unwind as fast as they arrive, so I'd be wary of reading a few weeks of churn as a new direction. What it does show is how twitchy pricing has become. Deals are lasting barely a fortnight, and it's the borrowers with the least room who feel it most, with some five-year fixes at 95% loan-to-value now back above 6%. The bigger picture hasn't shifted. Until the monthly cost of borrowing genuinely comes down and stays down, this is what I'd expect: small moves in both directions, and a market that stays stuck rather than turning.
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Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
July was yet another example of how quickly rates can turn and why assuming they will continue to fall is a dangerous game for borrowers to play. If people lock into a rate, a good broker will alert them should a lower rate become available before they complete. The mortgage market remains volatile and people should not take cuts for granted.
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Emma Jones
Managing Director at Whenthebanksaysno.co.uk
Increased tensions in the Middle East during July saw the price of oil rise again, which would feed inflation and potentially see the base rate hiked or at least stay higher for longer. Lenders started to factor that into their pricing and it's another reminder why borrowers need to lock into rates while they can rather than delay and wait for more cuts.
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Harry Goodliffe
Director at HTG Mortgages
Rates moved because swap rates spiked when trouble flared in the Middle East, and lenders reacted fast, wiping out July's cut in one go. But that average rate isn't the whole picture. Choice has grown for four months running, and nine in ten deals pulled are already back on the shelves. Anyone still on a lender's SVR is paying well over the odds compared to what's out there. This looks like another swap-rate wobble, not the start of a real climb, so potentially don't read too much into one month's numbers
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Richard Davidson
Mortgage Advisor at onlinemortgageadvisor.co.uk
The swings last month tell the real story. At one point in July, Nationwide cut rates while Halifax raised them, almost within a day of each other, both reacting to the same nervy backdrop of Middle East uncertainty.

None of that changes the bigger picture for buyers, and this is still their market. Choice keeps growing, lenders are competing hard for business, and getting a mortgage today is about as smooth a process as I've seen in years, so a short term rate rise is no reason to miss out on the long term benefits of owning your own home.
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Tracey Dixon
Buy-to-Let Mortgage Specialist & Owner at Pure Mortgage and Protection
Mortgage rates often take the stairs down and the lift back up, and July proved how quickly a few weeks of reductions can be wiped out.

The borrowers likely to feel this most are those with the smallest deposits. A five-year fixed rate above 6% at 95% loan-to-value could be the difference between a first-time buyer passing or failing affordability, despite having done the hard work of saving a deposit.

Although the number of available products is encouraging, choice and affordability are not the same thing. With deals lasting an average of only 11 days, borrowers need to be organised and ready to move when the right mortgage becomes available.