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Rates down - but for how long?

ended 13. July 2026

Moneyfacts data reveals that fixed mortgage rates have recorded their biggest monthly reductions since October 2024. At the same time, product choice has risen and the churn of mortgage deals has been stable. Moneyfacts says the average two- and five-year fixed rates have fallen by 0.16% and 0.11% respectively, with both reaching 5.52%, their lowest points since the start of March 2026. It says 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 (April to June). Additional findings below.

Any views, pronto please. Also looking for views on whether this will last given Iran strikes on US military bases and US strikes on Iran overnight.

  • The Moneyfacts Average New Mortgage Rate fell by 0.12%, to 5.47%, its biggest monthly fall since March 2025 (0.12%). It was last below 5% in March 2026 (4.90%).
  • Borrowers with a limited deposit or equity of just 5% will find rates lower month-on-month. The average five-year fixed rate at 95% loan-to-value (LTV) has dipped below 6% for the first time since March 2026.
  • Mortgage availability increased for a third consecutive month, with product choice rising by 45 deals to 7,177 options. 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.
  • Mortgage product churn continued throughout June, the average shelf-life of a deal now stands at 14 days, one day fewer than the month prior. Lenders were catching up to re-price their deals amid moving swap rates.
  • 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.

2 responses from the Newspage community

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Editor
Shaun Sturgess
Director at Sturgess Mortgage Solutions
Mortgage rates have been falling but sadly tensions in the Middle East are rising, with the US targeting military installations in Iran overnight and Iran claiming to have struck bases with US links in the region. Markets and lenders alike will be watching events in the Middle East closely and there is every prospect rates could rise again this week if we see further escalation. As ever, the message to borrowers is do not assume rates will continue to fall, as conditions remain volatile. Too many borrowers attempt to time the market and, at present, that is a high risk strategy.
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Editor
Emma Jones
Managing Director at Whenthebanksaysno.co.uk
In recent weeks mortgage rates have been falling but the conflict in the Middle East is once again heightening and borrowers should have this firmly on their radars. 2026 has been a textbook example of how quickly mortgage rates can react to geopolitical events and a continued fall in rates should not be taken for granted.