Mortgage market shows signs of recovery as product count returns above 7,000

While average fixed rates fall for a second consecutive month.

After a tumultuous few months, the mortgage market is showing some signs of recovery, with the overall product count returning above 7,000 for the first time since March, according to the latest Moneyfacts UK Mortgage Trends Treasury Report. It revealed borrowers had 7,132 deals to choose from at the beginning of June – up significantly from a recent low of 6,201 at the start of April.

“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,” she explained.

Reassuringly, product churn has since calmed, with a typical deal spending over two weeks (15 days) on the market at the start of this month – just one day shorter than the average shelf-life last month and a far cry from a record-low of eight days in May.

Fixed rates fall for a second month

Meanwhile, average two- and five-year fixed mortgage rates have dropped for a second consecutive month – the former by its biggest margin in over a year. A typical two-year fixed deal charged 5.68% at the start of June (down from 5.78% the previous month), while the average rate charged by a five-year fixed mortgage fell to 5.63% (from 5.68%) over the same timeframe.

However, Springall warned “the future direction of interest rates remains unclear”. As UK homeowners traditionally opt for two- or five-year fixed mortgage deals (in contrast to those in other countries with a preference for longer-term fixes), she explained that any more global events which cause significant volatility in the short-term could “choke the mortgage market”.

Busy time for remortgage borrowers

Despite the recent turbulence, there’s set to be lots of remortgage activity this year as roughly 1.8 million fixed deals are due to expire in 2026, according to UK Finance (around 200,000 more than in 2025).

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 Standard Variable Rate (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).

That being said, Springall urged borrowers to “seek advice to find the most appropriate deal, particularly so they are made aware of other costs”. “A recent study by Legal & General revealed over a third of consumers underestimated legal and property fees, which is why a mortgage deal with incentives can help,” she added.

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