Mortgage rates are still falling, albeit at a slower rate, despite some lenders making price hikes in the last few weeks.
This is according to the latest data from Moneyfacts which reports a typical two-year fixed rate has fallen by 0.06% from 5.18% in May to 5.12% in June whilst the five-year version dropped by an average of 0.01% to 5.09%.
These reductions were smaller than those seen in the previous month when a typical two-year fixed rate fall by 0.14% and the five-year fix dropped by 0.08%.
It comes as some mortgage lenders made price hikes in response to rising inflation and higher swap rates.
But despite these increases, Moneyfacts said the average two- and five-year fixed rates have not be as low since September 2022 (4.24%) and November 2024 (also 5.09%) respectively.
And this time last year the average five-year fixed rate was 5.50% compared to 5.09% today. Meanwhile the typical two-year fixed rate was 5.93% – significantly higher than the 5.12% today.
Rachel Springall, finance expert at Moneyfacts, said: “Lenders were busy repricing their mortgage ranges during May, but the margins of cuts to the overall two- and five-year fixed average rates were much smaller than seen a month prior.
“While the Bank of England base rate cut last month could be celebrated by borrowers, lenders can move rates in the opposite direction if swap rates rise.
“This can also cause opposing rate moves on longer-term fixed versus short-term, depending on the divergence of swap rates.”
Springall said the rate gap between the average two- and five-year fixed rates was currently the smallest it’s been since the inversion in rates started in October 2022, when the five-year was last higher than its two-year counterpart.
Springall also revealed the number of products on the market fell by 150 options but, despite this, choice was still higher than at the start of 2025 and deals for those with smaller deposits were ‘plentiful’.
“This churn of mortgage deals can occur,” Springall explained, “if lenders pull and replace deals to cope with interest rate moves and borrower demand.”
