UK mortgage rates fall fastest in nearly two years

Average mortgage rates in the United Kingdom have fallen at their fastest monthly pace in nearly two years, offering a measure of relief to borrowers after a period of significant volatility. According to data from financial information firm Moneyfacts, the average two-year fixed mortgage rate dropped by 0.16 percentage points in July, while the average five-year fixed rate fell by 0.11 percentage points. Both now stand at 5.52 percent, their lowest level since early March.

The broader average rate for new mortgages also declined, falling 0.12 percentage points to 5.47 percent. The number of available mortgage products increased for a third consecutive month, reaching 7,177 deals, though this remains 307 fewer than were on the market at the start of March. Finance expert Rachel Springall said borrowers would welcome the falling fixed rates combined with a calmer period of product churn and an uplift in choice.

The recent declines mark the most significant monthly reductions since October 2024 and have helped unwind an unusual pricing anomaly that had persisted for approximately three months. During that period, average two-year fixed rates were higher than five-year rates, a...