Mortgage Rates Are Falling: What UK Borrowers Need to Know in June 2026

If you have a mortgage coming up for renewal — or you're thinking about buying — the current rate environment is meaningfully better than a year ago. The average two-year fixed mortgage rate has fallen to 4.25% in June 2026, down from 4.99% at the same point in 2025. That's a notable shift, and it's worth understanding what's driving it and what it might mean for your monthly payments.

The Base Rate Picture

The Bank of England held its Base Rate at 3.75% on 18 June 2026. The rate has been easing over the past 18 months from its 2023 peak of 5.25%. While the base rate itself wasn't cut again this month, lenders have continued to reduce their fixed-rate offerings in anticipation of further base rate cuts expected later in 2026.

The average Standard Variable Rate (SVR) currently sits at around 6.49% — considerably higher than the best available fixed deals. Anyone still sitting on their lender's SVR is likely overpaying significantly and should review their options.

Current Average Rates (June 2026)

• 2-year fixed: ~4.25% average
• 5-year fixed: lower than 2-year for some lenders (due to rate cut expectations)
• SVR: ~6.49%
• Average monthly mortgage payment (based on average asking price of £371,042): £1,697

What Does £1,697/month Actually Mean?

That £1,697 figure is a national average based on a 4.78% rate and the average UK asking price. In practice, your payment depends heavily on:

• Your specific loan amount and deposit size
• Whether you're on a repayment or interest-only mortgage
• The rate you qualify for based on credit history and income

Comparing to Other Countries

UK mortgage rates sit in the middle of the international range. In the US, 30-year fixed mortgage rates remain around 6.5–7% in mid-2026 — significantly higher. The Eurozone average is around 3.5–4%, benefiting from the ECB's rate path. In Australia, rates are around 5.5–6%. The UK's falling-rate environment is a relative positive compared to the US.

Should You Fix Now?

If your current deal is ending in the next three to six months, it's worth starting to look now. Most lenders let you lock in a rate three to six months in advance without commitment, so you could secure a deal and then potentially switch if rates drop further before completion.

There's no certainty about where rates will go. Some forecasters expect the Bank of England to cut once or twice more before the end of 2026; others think the base rate will stay near current levels. Fixing gives you payment certainty; waiting is a bet that rates will fall further.

Key Numbers

• Average 2-year fixed rate: 4.25% (June 2026)
• Bank of England Base Rate: 3.75%
• Average SVR: ~6.49%
• Average UK asking price: £371,042
• Estimated average monthly mortgage payment: £1,697

Sources

• UK Mortgage Rates Today — Uswitch
• Mortgage Rate Forecast 2026 — HomeOwners Alliance
• Current UK Mortgage Rates — Rightmove
• Bank of England Monetary Policy Summary, June 2026
• Mortgage Rate Cuts June 2026 — Mortgage One

Educational content only — not financial advice. Mortgage rates change frequently. Always compare products and consider speaking to an independent mortgage broker.