The average two year fixed mortgage rate fell by 0.16% over the month to 5.52%, while the average five year fixed rate dropped by 0.11% to the same level. Both rates are now at their lowest since the beginning of March 2026.
The latest reductions also begin to reverse the recent rate inversion, with two year fixed rates having been higher than five year rates between April and June.
The Moneyfacts Average New Mortgage Rate fell by 0.12% to 5.47%, matching its biggest monthly decline since March 2025. The average rate was last below 5% in March 2026, at 4.90%.
Borrowers with smaller deposits also saw rates improve, with the average five year fixed rate at 95% loan to value falling below 6% for the first time since March 2026.
Mortgage product choice continued to recover following widespread product withdrawals earlier this year, increasing by 45 deals during the month to 7,177. However, the market still has 307 fewer products than were available at the beginning of March.
The average shelf life of a mortgage product fell from 15 days to 14 days during June, reflecting continued repricing by lenders as swap rates moved.
The average standard variable rate stood at 7.13%, down from 7.42% a year earlier, maintaining a significant gap between reversion rates and fixed mortgage deals.
Rachel Springall, finance expert at Moneyfacts, said: "Borrowers will breathe a sigh of relief to see fixed mortgages falling at their fastest pace for almost two years, combined with a calmer period of product churn and an uplift in choice. Lenders responded positively to falling swap rates in June, seeing notable drops to the average two and five year fixed rates by 0.16% and 0.11% respectively, both settling at 5.52%.
"The last cuts of a similar scale came in October 2024, when the rates dropped by 0.16% and 0.13% respectively. It has been three months since fixed rates inverted, where the two year fixed has been higher than its five year counterpart. However, this has started to unwind, so the rates should hopefully start to fall back into a more traditional pricing structure. However, this positive trajectory could be thrown off course, as renewed escalation in geopolitical tensions could slow the tempo of mortgage rate cuts."
Commenting on the figures, Nathan Emerson, CEO at Propertymark, said: "Any fall in mortgage rates should help boost flexibility for both buyers and sellers, and it could perhaps be a sign that the UK housing market is overcoming what may be the worst of the mortgage rate rises witnessed in recent years.
"However, with inflation figures due next week, all eyes will likely turn to the Bank of England and its next base rate decision at the end of the month. There has been speculation that we may see a rate rise over the coming months, which could shift sentiment among lenders as the year progresses."
