Mortgage Rates Fall to Lowest Levels Since 2022: What Buyers and Remortgagers Need to Know
New data from Moneyfacts reveals that average two- and five-year fixed mortgage rates have dropped to their lowest levels since early September 2022, before the turbulence of the government’s mini-Budget. This marks a significant shift for anyone looking to buy, remortgage, or explore their options heading into 2026.
Fixed Mortgage Rates Continue to Ease
According to the latest UK Mortgage Trends Treasury Report:
Two-year fixed rates fell by 0.08% in the month, now averaging 4.86%.
Five-year fixed rates dropped by 0.10%, sitting at 4.91% – the first time this has fallen below 5% since May 2023.
Across all residential products, the average mortgage rate fell from 4.99% to 4.91%, now more than half a percentage point lower than December 2024’s 5.44%.
These reductions signal growing confidence among lenders and increased competition for borrowers.
More Mortgage Products Available – Especially for First-Time Buyers
Product choice has expanded significantly:
There are now 7,054 residential mortgage products available – close to a record high.
The average shelf life of a mortgage deal has shortened to just 18 days, demonstrating rapid repricing and lender activity.
The biggest growth has been at higher loan-to-value (LTV) ranges, particularly beneficial for first-time buyers:
95% LTV products have increased by 111 over the past year.
90% LTV products have risen by 155 year-on-year.
Both LTV bands are now at their highest point since March 2008, creating more choice and potentially more affordable routes onto the property ladder.
Tracker Rates Remain Stable
While fixed rates have seen the most movement, tracker and standard variable rates have been relatively steady:
The average two-year tracker remains at 4.66%, although this is significantly lower than last year’s 5.46%.
The average Standard Variable Rate (SVR) held at 7.27%, down from 7.85% a year ago and below the peak of 8.19% at the end of 2023.
Expert Commentary: Positive Momentum for 2026
Moneyfacts finance expert Rachel Springall notes that lenders’ repricing activity has created meaningful reductions, particularly across five-year fixed products. She highlights government pressure on lenders to support homebuyers, especially at high-LTV levels, as a key driver of competition.
The overall picture is increasingly positive:
Rate cuts
More product choice
A stabilising housing market
Expectations of further Bank of England base rate reductions
All contribute to a more optimistic outlook as we approach 2026.
However, Springall points out that households coming off historically low fixed rates will face higher repayments. The Bank of England estimates that 3.9 million households will remortgage onto higher rates over the next three years.
What This Means for You
With rates shifting quickly and lenders updating products at pace, seeking personalised mortgage advice is essential. Whether you’re buying your first home, moving, or preparing to remortgage, understanding the full picture can help you secure the right deal and avoid unnecessary costs.
If you’d like tailored guidance based on your circumstances, J Finance is here to help.