Rachel Springall, Finance Expert at Moneyfacts, said:
“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. Lenders responded positively to falling swap rates in June, seeing notable drops to the average two- and five-year fixed rates by 0.16% and 0.11% respectively, both settling at 5.52%. The last cuts of a similar scale came in October 2024, when the rates dropped by 0.16% and 0.13% respectively. It has been three months since fixed rates inverted, where the two-year fixed has been higher than its five-year counterpart. However, this has started to unwind, so the rates should hopefully start to fall back into a more traditional pricing structure. However, this positive trajectory could be thrown off course, as renewed escalation in geopolitical tensions could slow the tempo of mortgage rate cuts.
“Mortgage product choice recovery from the steep drops seen back in April may have slowed, with an uplift of 45 options since the beginning of June, but it is the combined total of 976 deals returning since the start of May that calls for celebration. This equates to around three-quarters (76%) of mortgage deals coming back of the 1,283 products withdrawn in April. Stability appeared to be a recurring theme during June, with the average shelf-life of a deal recorded at 14 days, from 15 days the month before. This is a much more acceptable timeframe compared to the record low of eight days recorded at the start of April. Borrowers with just a small deposit or equity of 10% may be pleased to know that further recovery of product choice at 90% LTV has surpassed 900 options for the first time since the start of March 2026. However, there is still room for improvement across the higher LTV terms, particularly for borrowers who can only amass a 5% deposit; these deals make up just 8% of the core market (5,848).
“Despite ongoing affordability pressures in the mortgage market, a recent study from Yorkshire Building Society revealed that 88% of UK adults felt homeownership is important. Therefore it is vital that lenders continue to create innovative products and relax criteria carefully to support first-time buyers, as they remain the lifeblood of the mortgage market. Buyer confidence may well remain subdued until the supply of affordable housing improves this year, but for now, mortgage costs are not expected to rapidly escalate. However, there are other ways to reduce the costs of buying a home and stimulate the housing market, such as adjusting the nil-rate bands threshold for Stamp Duty Land Tax (SDLT) for first-time buyers. Seeking advice in the first instance to understand costs and to navigate the mortgage maze is vital, as headline-grabbing low-rate deals might not always be the best choice.”
Rachel Springall, Finance Expert at Moneyfacts, said:
“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. Lenders responded positively to falling swap rates in June, seeing notable drops to the average two- and five-year fixed rates by 0.16% and 0.11% respectively, both settling at 5.52%. The last cuts of a similar scale came in October 2024, when the rates dropped by 0.16% and 0.13% respectively. It has been three months since fixed rates inverted, where the two-year fixed has been higher than its five-year counterpart. However, this has started to unwind, so the rates should hopefully start to fall back into a more traditional pricing structure. However, this positive trajectory could be thrown off course, as renewed escalation in geopolitical tensions could slow the tempo of mortgage rate cuts.
“Mortgage product choice recovery from the steep drops seen back in April may have slowed, with an uplift of 45 options since the beginning of June, but it is the combined total of 976 deals returning since the start of May that calls for celebration. This equates to around three-quarters (76%) of mortgage deals coming back of the 1,283 products withdrawn in April. Stability appeared to be a recurring theme during June, with the average shelf-life of a deal recorded at 14 days, from 15 days the month before. This is a much more acceptable timeframe compared to the record low of eight days recorded at the start of April. Borrowers with just a small deposit or equity of 10% may be pleased to know that further recovery of product choice at 90% LTV has surpassed 900 options for the first time since the start of March 2026. However, there is still room for improvement across the higher LTV terms, particularly for borrowers who can only amass a 5% deposit; these deals make up just 8% of the core market (5,848).
“Despite ongoing affordability pressures in the mortgage market, a recent study from Yorkshire Building Society revealed that 88% of UK adults felt homeownership is important. Therefore it is vital that lenders continue to create innovative products and relax criteria carefully to support first-time buyers, as they remain the lifeblood of the mortgage market. Buyer confidence may well remain subdued until the supply of affordable housing improves this year, but for now, mortgage costs are not expected to rapidly escalate. However, there are other ways to reduce the costs of buying a home and stimulate the housing market, such as adjusting the nil-rate bands threshold for Stamp Duty Land Tax (SDLT) for first-time buyers. Seeking advice in the first instance to understand costs and to navigate the mortgage maze is vital, as headline-grabbing low-rate deals might not always be the best choice.”
