Mortgage Rates Begin Falling as Lenders Cut Fixed Deals in June
Major UK lenders including NatWest, Barclays and Santander have cut mortgage rates in recent weeks, with average 2-year fixes now around 5.68%, down from spring highs but still well above 2025 levels.
UK mortgage rates have started to ease after spiking sharply in March and April, as swap rates — the wholesale cost that determines fixed-rate pricing — have drifted lower and lenders compete for business.
Several major UK lenders including NatWest, Barclays, Santander, Halifax, Coventry Building Society and TSB reduced selected fixed mortgage rates in the opening weeks of June 2026, with NatWest cutting rates for a third time in a fortnight from 8 June.
Where rates stand now
The average 2-year fix stands at 5.68% and the 5-year at 5.63% as of early June 2026. At 60% LTV, Barclays leads the 2-year market at 4.39% and HSBC the 5-year at 4.43%.
These figures represent a drop from the spring peak but are still significantly higher than rates available in early 2026. Moneyfacts analysis puts the increase for a typical £250,000 mortgage over 25 years at close to £300 a month compared with pricing before the early-2026 shock, an annual difference of around £3,380.
Why rates rose — and why they're easing
Mortgage rates jumped sharply following the outbreak of the conflict in the Middle East, as swap rates rose. Over the past month swap rates have drifted lower as inflation data softened and energy-market tensions calmed, giving lenders room to cut.
The Bank of England held interest rates at 3.75% on 18 June for the fourth consecutive time, and as of 2 July, financial markets expected the Bank to hold at 3.75% for the rest of the year.
What this means for you
If you're buying a home in the UK, remortgaging, or considering a move, mortgage affordability remains stretched compared to 2025. However, the recent cuts offer a slightly better window than April's peak.
For expats and foreign buyers, currency movements also matter: if you're earning abroad and converting to pounds for a UK purchase, both the exchange rate and the mortgage rate will determine your real cost. Even a small rate cut — say, from 5.5% to 5.2% — can save hundreds of pounds a year on a typical mortgage, so it's worth comparing deals now and locking in if you're ready to move.
Sources
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