While average fixed rates fall for a second consecutive month.
After a tumultuous few months, the mortgage market is showing some signs of recovery, with the overall product count returning above 7,000 for the first time since March, according to the latest Moneyfacts UK Mortgage Trends Treasury Report. It revealed borrowers had 7,132 deals to choose from at the beginning of June – up significantly from a recent low of 6,201 at the start of April.
“It has now been three months since the conflict in the Middle East began which sent a shockwave of uncertainty across the markets,” said Rachel Springall, Finance Expert at Moneyfactscompare.co.uk. “These events completely flipped the expected path of interest rate setting for 2026 and spooked lenders into pulling mortgage deals from sale,” she explained.
Reassuringly, product churn has since calmed, with a typical deal spending over two weeks (15 days) on the market at the start of this month – just one day shorter than the average shelf-life last month and a far cry from a record-low of eight days in April.
Fixed rates fall for a second month
Meanwhile, average two- and five-year fixed mortgage rates have dropped for a second consecutive month – the former by its biggest margin in over a year. A typical two-year fixed deal charged 5.68% at the start of June (down from 5.78% the previous month), while the average rate charged by a five-year fixed mortgage fell to 5.63% (from 5.68%) over the same timeframe.
However, Springall warned “the future direction of interest rates remains unclear”. As UK homeowners traditionally opt for two- or five-year fixed mortgage deals (in contrast to those in other countries with a preference for longer-term fixes), she explained that any more global events which cause significant volatility in the short-term could “choke the mortgage market”.