The mortgage market is seeing renewed optimism as lenders continue to slash fixed rates and ease stress testing rules — great news for buyers and homeowners looking to remortgage.
According to the latest Moneyfacts UK Mortgage Trends report, both two- and five-year fixed mortgage rates have edged lower, while product availability continues to rise. These positive changes mark a continued recovery in affordability and competition among lenders.
Fixed Rates Drop Across the Board
The average two-year fixed rate has fallen to 5.09%, a significant drop from 5.95% at the start of July 2024. This 0.86% decline translates to substantial monthly savings — around £199 less per month on a £250,000 mortgage over 25 years, compared to this time last year.
Meanwhile, the five-year fixed rate has also seen a steady decrease, now at 5.08%, down from 5.53% just a month ago. While the two-year rate remains slightly higher (by just 0.01%), the margin is now the slimmest it has been since fixed rates inverted in 2022.
Why it matters: For anyone nearing the end of their fixed term or thinking about getting onto the ladder, now could be the time to lock in a lower rate — especially before further market movements.
Stress Tests Relaxed, Affordability Improved
In addition to rate cuts, lenders are relaxing their affordability stress tests, helping more borrowers qualify for better mortgage deals. This is especially helpful for first-time buyers and home movers who may have struggled with tight affordability checks over the past two years.
Rachel Springall, finance expert at Moneyfacts, commented:
“Lenders have responded to market pressures with lower rates and relaxed criteria, helping borrowers take advantage of improved affordability. However, we still need further action, particularly around income-based lending restrictions, to support first-time buyers.”
Product Availability Grows — Competition Heats Up
Mortgage choice continues to expand, with 6,908 mortgage products now available — one of the highest levels since 2007. This wider product pool gives borrowers more flexibility, whether they’re seeking low-deposit deals or switching to longer-term fixed products.
But with competition comes urgency: the average mortgage product shelf-life has dropped to just 16 days, the shortest since March 2025. This means deals are being repriced or withdrawn quicker than ever.
Tip: If you see a deal that works for you, don’t delay. Speak with a mortgage adviser to act fast before it’s gone.
Key Mortgage Market Stats (as of July 2025):
| Metric | Value |
|---|---|
| Avg. 2-Year Fixed Rate | 5.09% |
| Avg. 5-Year Fixed Rate | 5.08% |
| Avg. SVR (Standard Variable Rate) | 7.42% |
| Avg. Tracker Rate | 4.91% |
| Total Products Available | 6,908 |
| Avg. Product Shelf-Life | 16 days |
What This Means for You
Whether you’re looking to buy your first home, remortgage, or invest in property, these falling rates — combined with increased lender flexibility — mean more options and better affordability.
At Lyss Homes, we work closely with trusted mortgage advisers who can guide you through the best deals in today’s fast-moving market. If your current deal is ending or you’re unsure where to start, we’re here to help.
