Good news for many homeowners and prospective buyers: average two-year fixed mortgage rates have dipped to 5.77%, down from 5.90% just last month. This slight easing, effective as of June 11, 2026, offers a glimmer of relief in what has been a challenging market.
What Changed and By How Much?
The latest figures show a continued downward trend in mortgage rates. The average two-year fixed rate is now 5.77%, a notable drop from 5.90% recorded in May. Similarly, the average five-year fixed rate has also decreased, moving from 5.78% to 5.69%.
This movement comes despite the Bank of England (BoE) Monetary Policy Committee holding its Official Bank Rate steady at 3.75% in both April and March 2026. The BoE had previously cut the Bank Rate by 1.5 percentage points between August 2024 and December 2025, which has gradually fed through to the market.
While these drops are welcome, it's important to keep perspective. Mortgage rates eased to 4.72% at the beginning of June 2026, but remain almost 1% higher than before the recent conflict in the Middle East, as reported by Forbes.
Looking at the broader market, the outstanding value of all residential mortgage loans in the UK saw a 0.7% increase from the previous quarter, reaching £1,746.1 billion in Q1 2026. However, gross mortgage advances decreased by 12.3% quarter-on-quarter to £69.6 billion, suggesting fewer new loans are being taken out, even as new mortgage commitments increased by 11.5% to £78.0 billion.
What this means for you
If you're a homeowner approaching the end of your current fixed-rate deal, or a first-time buyer looking to step onto the property ladder, these falling rates could mean a slight easing of pressure on your potential monthly outgoings. While the percentage drop might seem small, even a fraction of a percent can add up over the term of a mortgage. For example, on a a £200,000 mortgage, a drop from 5.90% to 5.77% could shave a small but noticeable amount off your monthly repayments, freeing up a little extra cash for other household expenses or savings.
Step-by-Step: What to Do Right Now
- Check Your Current Deal: If you're on a fixed rate, note down when it ends. If you're on a variable rate, understand how these market changes might affect you sooner.
- Speak to a Mortgage Broker: An independent mortgage adviser can assess your personal circumstances and scour the market for the best deals available to you, including any exclusive rates not advertised directly.
- Review Your Savings Strategy:
- First-Time Buyers: If you're saving for a deposit, consider a Lifetime ISA (LISA). The government adds a 25% bonus to your contributions, up to a maximum of £1,000 free each year if you save the full £4,000 annual limit.
- All Savers: Utilise a Cash ISA for tax-free savings. Remember your Personal Savings Allowance (PSA) allows you to earn a certain amount of interest tax-free outside of an ISA too (£1,000 for basic rate taxpayers, £500 for higher rate taxpayers). Always check if a savings rate is variable or includes a temporary bonus that may expire.
But There Are Risks
While the direction of travel for mortgage rates is positive, it's crucial to acknowledge the wider economic context. Forbes also reported that house prices were down in May, with buyer confidence eroded by the ongoing Middle East conflict. This suggests a cautious market where, despite falling rates, other factors are still impacting activity and sentiment.
Furthermore, while rates have fallen, they remain elevated compared to pre-conflict levels, meaning affordability continues to be a key challenge for many.
When Effective
The average mortgage rates cited are current as of June 11, 2026. The Bank of England's decision to hold the Official Bank Rate at 3.75% was made on April 30, 2026, and March 19, 2026, following a period of cuts from August 2024 to December 2025.
Where to Get Help
Navigating the mortgage market can be complex. For personalised advice, it's always recommended to speak with an independent mortgage adviser or a financial planner who can offer guidance tailored to your specific situation.
Sources
- Forbes — Mortgage News: Rates Continue Falling As Regulator Seeks More Flexibility For Borrowers (June 2026)
- Forbes — House Prices Down In May As Middle East War Erodes Buyer Confidence – Nationwide (May 2026)
- Bank of England — Official Bank Rate decisions (April 30, 2026, and March 19, 2026)
- Bank of England — Residential mortgage lending statistics (Q1 2026)
This is not financial advice. Seek independent mortgage guidance. Savings rates shown may be variable and include introductory bonuses. Interest may be taxable above your Personal Savings Allowance.