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After a tough few months of higher mortgage rates and limited deals due to ongoing economic uncertainty, the mortgage market is starting to show signs of recovery, with 7,132 deals available, up from 6,201 at the start of April.
You may want to act fast to snap up one of these deals, however, as the average shelf life of a mortgage deal is currently just 15 days, according to financial website Moneyfactscompare.co.uk, though that’s an improvement on the 8-day average in May.
“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.”
Fortunately for borrowers, as well as there now being a much wider choice of mortgage options available, fixed rate deals have been gradually improving. As of June 2026, the average rate for a two-year fix stood at 5.68%, down from 5.78% in May. Meanwhile, the average five-year fix is 5.63%, having fallen from 5.68% last month.
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Want to speak to a mortgage adviser? Speaking to an experienced adviser can help you to understand your options and get a great deal on your mortgage.
If you’re looking for expert mortgage advice, you can get a free consultation with an independent mortgage adviser at Fidelius. Speak with a qualified, FCA-regulated, independent mortgage adviser you can trust. Rated 4.7/5 on VouchedFor from over 2,600 reviews.
Rather than being pegged to the base rate, fixed mortgage rates are predominantly determined by what is happening to ‘swap’ rates. These are fixed rates that institutions charge each other to borrow money.
Swap rates are affected by various factors, including long-term market projections for the Bank of England base rate, as well as the broader economic outlook. Swap rates have eased recently amid expectations of further rate cuts and lower-than-expected inflation numbers, but could start to tick up again if inflation moves further away from the government’s 2% target in the coming months.
While these are positive signs for the mortgage market, the rates on offer are still a far cry from those available just two years ago. The average two-year fix in November 2021 was 2.29%, less than half the current average. Remember, however, that these are all just average rates, so you’ll usually be able to secure a much lower rate than the average 5.68% two-year fix and average 5.63% five-year fix, provided you own a good chunk of equity in your home and can prove that monthly payments will be affordable.
Should I remortgage now?
With fixed rate deals on the way down, if you’re approaching the end of your current mortgage deal, remortgaging rather than moving onto your lender’s standard variable rate (SVR) is usually a no-brainer, particularly if you’ve been patiently waiting for lower rates to start emerging.
A spokesman for Moneyfacts said: “Borrowers coming to the end of a fixed deal are likely to find it more cost-effective to secure a new fixed rate – rather than revert to their lender’s SVR – even if prices aren’t as favourable as at the start of the year. With the average SVR holding steady at 7.13% at the beginning of the month, those who don’t act could end up paying over £200 more per month compared to those who opt for a typical two-year fixed deal (based on a £250,000 loan repaid over 20 years).”
If you’re delaying remortgaging in the hope that rates may come down further, bear in mind that there’s no guarantee that rates will improve quickly, and it is very unlikely that they’ll return to the levels seen a few years ago any time soon, so there is certainly a good argument for remortgaging sooner rather than later – our article Five good reasons to remortgage right now goes into more detail.
If you want to roll over from one deal to another to avoid moving onto your lender’s SVR, you ideally think about applying for a new mortgage three to six months before your current deal ends. This way, you’ll have time to shop around, submit your mortgage application and arrange for your new mortgage to begin when your current deal finishes.
The best thing about starting it early is it gives you time to watch the market. If rates go down before your new deal is due to begin then as long as it makes financial sense you could look to switch to a lower rate. However, if rates go up then you already have an offer secured at the lower rate.
What are the different types of mortgage?
Now that the mortgage market is opening up and there is a record number of mortgage products to choose from, it’s worth familiarising yourself with the different types of mortgages so you can make the best choice for your finances. For a more in-depth explanation of the various types of mortgages, check out our guides Different types of mortgages explained and Should I go for a fixed or variable rate mortgage?
Fixed rate mortgages
With a fixed rate mortgage, you lock into a certain interest rate for a period of time, usually two, three, five or ten years. Taking out a fixed rate mortgage when interest rates are low is usually a smart move, because it means that your repayments won’t increase even if interest rates go up.
Tracker mortgages
A tracker mortgage is a variable rate mortgage where the amount of interest you pay each month is tied to the base rate, plus a set percentage. This means that if the base rate eventually begins to fall, so will the size of your repayments.
Discounted rate mortgages
A discounted mortgage, as the name suggests, is where the interest rate you’ll pay is a discount on the lender’s Standard Variable Rate (SVR). A lender’s SVR is usually what you will automatically roll onto when your introductory deal with them ends, and will generally be quite a bit higher than the rate on your deal. You normally don’t want to stay on the full SVR for too long if you can avoid it, so a discount rate can be a good option if you don’t mind the fact your payments will fluctuate over time.
Offset mortgages
With an offset mortgage, you keep a certain amount of cash savings in an account provided by the lender. Rather than earning any interest on this cash, it will instead reduce the capital left in your mortgage, meaning you only need to pay interest on your mortgage minus these savings.
For example, if you have £20,000 in savings and a £200,000 mortgage, you will only have to pay interest on £180,000. Find out more about offset mortgages in our guide What is an offset mortgage?
Interest-only mortgages
An interest-only mortgage is one where, as the name suggests, you only make interest payments each month, rather than paying off the capital. You then pay off the capital itself at the end of the mortgage term, so you’ll need to prove to lenders that you have – or will have – the funds in order to do this. Learn more in our article How do I pay off my interest-only mortgage?
Retirement interest-only (RIO) mortgages
RIO mortgages are similar to interest-only mortgages. However, instead of requiring repayment at a particular end date, instead you keep making interest payments until you die or go into long-term care. At this point, the loan is repaid, usually by selling the property.
Lifetime mortgage
A lifetime mortgage is a type of equity release plan where you receive the loaned amount and do not make any monthly repayments at all – neither loan capital nor interest must be repaid during the term, although you can make voluntary repayments if you want to. As with a RIO mortgage, this is usually only repaid when you die or move into care, again typically by selling the home. Find out more in our guide What’s the difference between equity release and a retirement interest-only mortgage?
Which type of mortgage should I go for?
Ultimately, the right answer will depend on your own situation – factors such as your need for budgeting certainty and financial priorities should play into which type of mortgage you choose. If you are unsure of what to do, it is usually wise to seek the advice of a mortgage advisor, who can give you advice based on your circumstances.
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Want to speak to a mortgage adviser? Speaking to an experienced adviser can help you to understand your options and get a great deal on your mortgage.
If you’re looking for expert mortgage advice, you can get a free consultation with an independent mortgage adviser at Fidelius. Speak with a qualified, FCA-regulated, independent mortgage adviser you can trust. Rated 4.7/5 on VouchedFor from over 2,600 reviews.
If you are struggling with high mortgage payments at the moment, you’re not alone. Our article Eight ways to manage higher mortgage payments takes a closer look at some options that you could consider to help ensure you don’t fall behind with your payments.
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