Mortgage Rates Continue to Fall – What It Means for Homebuyers in 2026

There has been welcome news for anyone thinking about buying a home or remortgaging in 2026. Recent figures show that average mortgage rates have fallen at their fastest pace in almost two years, while the number of mortgage products available remains high.

For many borrowers, this combination of lower rates and increased choice could make it easier to find a mortgage that suits their circumstances.

Fixed Mortgage Rates Are Falling

According to the latest Moneyfacts UK Mortgage Trends Treasury Report, both two-year and five-year fixed mortgage rates have fallen.

These are the lowest average fixed rates recorded since March 2026 and represent the largest monthly reductions since October 2024.

For borrowers, falling fixed rates can help improve affordability by reducing monthly mortgage repayments compared to the rates seen earlier this year.

Good News for Buyers With Smaller Deposits

One of the most encouraging developments has been the improvement in mortgage pricing for buyers with smaller deposits.

For borrowers purchasing with a 5% deposit (95% loan-to-value):

• The average five-year fixed rate has fallen below 6% for the first time since March, dropping from 6.02% to 5.92%.
• The average two-year fixed rate has also fallen from 6.23% to 6.13%.

Borrowers with larger deposits have also benefited.

At 60% loan-to-value, the average two-year fixed rate has dropped below 5%, while average five-year rates have continued to edge down.

Although affordability remains a challenge for many households, these reductions may help make homeownership more accessible than it has been in recent months.

More Mortgage Products to Choose From

Alongside falling interest rates, mortgage choice has remained strong.

Moneyfacts reports that the number of mortgage products available increased from 7,132 in June to 7,177 in July, giving borrowers a wide range of options across different deposit levels.

While products for buyers with a 5% deposit remain more limited than those available to borrowers with larger deposits, the overall mortgage market continues to offer significantly more choice than many people experienced over the past few years.

More competition between lenders often benefits borrowers, as financial institutions compete by adjusting interest rates and introducing new mortgage products.

Mortgage Products Are Still Changing Quickly

Although mortgage choice has improved, products are continuing to change at a relatively fast pace.

The average mortgage now remains available for around 14 days before being withdrawn or replaced.

While this is more stable than the rapid changes seen earlier in the year, it serves as a reminder that mortgage rates and products can still change quickly.

Anyone considering buying a property or remortgaging should be aware that the mortgage market can move rapidly as lenders respond to changing economic conditions.

Could Mortgage Rates Continue to Fall?

Many of the recent improvements have been linked to falling swap rates, which influence how lenders price fixed-rate mortgages.

However, economists continue to warn that wider global events and economic uncertainty could still affect future mortgage pricing.

While current trends are encouraging, there is no guarantee that rates will continue to fall at the same pace.

For this reason, many borrowers choose to keep a close eye on the market rather than assuming today’s rates will still be available several months from now.

Homeownership Remains an Important Goal

Despite the challenges many buyers have faced over recent years, the desire to own a home remains strong.

Research highlighted by Moneyfacts found that 88% of UK adults believe homeownership is important, demonstrating that owning a property continues to be a significant long-term ambition for many people.

As lenders continue to compete and introduce new mortgage products, buyers may benefit from greater flexibility and more opportunities than were available during periods of higher interest rates.

Looking Ahead

The latest mortgage figures provide encouraging signs for borrowers. Falling fixed rates, increased product choice, and greater competition between lenders have all contributed to a more positive outlook for the housing market.

While affordability remains an important consideration, the mortgage market appears to be moving in a more favourable direction than it was earlier in the year.

Source: Moneyfacts UK Mortgage Trends Treasury Report, July 2026.