The average two- and five-year fixed rates have reached their lowest levels since the start of September 2022, just before the mini Budget.
According to the Moneyfacts UK Mortgage Trends Treasury Report, average two- and five-year fixed rates contracted by 0.085% and 0.1% to 4.86% and 4.91% respectively.
The report found that the average five-year fixed rate had fallen below 5% for the first time since May 2023.
Moneyfacts noted that product choice had increased to 7,054 options, which it said was close to a record high. It is up from 6,918 in November and up from 5,694 this time last year.
Looking at different loan to values (LTVs), products at 95% LTV have gone up by 111 over the past year to 476, while at 90% LTV, they rose by 155 to 917 over the same period.
The report noted that no other LTV tier had increased by over 100 deals year-on-year.
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The average two-year tracker variable mortgage rate stayed stable at 4.66%, while month-on-month, it has fallen by 0.8% year-on-year to 5.46%.
The average standard variable rate (SVR) came to 7.27%, down by 0.58% year-on-year. This is down from the high of 8.19% reported during November and December.
| Mortgage market analysis | ||||||
| Dec 2023 | Dec 2024 | Jun 2025 | Nov 2025 | Dec 2025 | ||
| Fixed and variable rate products | Total product count – all LTVs | 5,694 | 6,486 | 6,843 | 6,918 | 7,054 |
| Product count – 95% LTV | 253 | 365 | 453 | 465 | 476 | |
| Product count – 90% LTV | 718 | 762 | 873 | 897 | 917 | |
| Product count – 60% LTV | 623 | 778 | 793 | 787 | 805 | |
| All products | Shelf life (days) | 17 | 21 | 17 | 21 | 18 |
| All LTVs | Average two-year fixed rate | 6.04% | 5.52% | 5.12% | 4.94% | 4.86% |
| Average five-year fixed rate | 5.65% | 5.28% | 5.09% | 5.01% | 4.91% | |
| 95% LTV | Average two-year fixed rate | 6.34% | 5.92% | 5.57% | 5.41% | 5.33% |
| Average five-year fixed rate | 5.73% | 5.53% | 5.52% | 5.41% | 5.33% | |
| 90% LTV | Average two-year fixed rate | 6.01% | 5.8% | 5.38% | 5.24% | 5.13% |
| Average five-year fixed rate | 5.71% | 5.4% | 5.21% | 5.16% | 5.07% | |
| 60% LTV | Average two-year fixed rate | 5.59% | 5.04% | 4.58% | 4.43% | 4.32% |
| Average five-year fixed rate | 5.2% | 4.86% | 4.65% | 4.67% | 4.57% | |
| All LTVs | SVR | 8.19% | 7.85% | 7.48% | 7.27% | 7.27% |
| All LTVs | Average two-year tracker rate | 6.16% | 5.46% | 4.91% | 4.66% | 4.66% |
| Data shown is as at the first available day of the month, unless stated otherwise. | ||||||
| Source: Moneyfacts Treasury Reports | ||||||
Rachel Springall, finance expert at Moneyfacts, said mortgage rates were continuing on a “downward trend” in November and December.
“The repricing by lenders led to the average five-year fixed rate dropping below 5% for the first time in over two years and sits at its lowest point since before the ‘mini Budget’ in September 2022, alongside its two-year counterpart.
“The average two-year fixed rate noted its biggest monthly fall since August this year, with the five-year noting its largest monthly fall in over six months (March 2025). The activity during November led to a drop in the average shelf life of a mortgage to just 18 days, and product choice felt a positive rise to breach 7,000 deals,” she said.
Springall noted that year-on-year, the mortgage market had seen an “optimistic shift in the availability of products” for borrowers with smaller deposits, with over 300 deals added at 90% and 95% LTV tiers.
“The volume of deals at these tiers now rests at their highest counts since March 2008. The government has been very vocal that it wants lenders to do more to support buyers to boost UK growth, so any improvement in high-LTV deals should be celebrated as it gives borrowers more choice as competition ramps up,” she said.
Springall explained that the improvement in the “cost and product availability of mortgages paints a positive picture for borrowers as we edge towards the new year”.
“This year has not been without a few ups and downs for rate moves and product availability, but all signs are looking encouraging for the mortgage market to thrive moving into 2026. The Budget has been and gone, expectations for another base rate cut are high, and muted house price growth as a combination can lead to optimistic sentiment among buyers.
“However, those who locked into a cheap fixed deal five years ago will need to accept that they will have to cover higher repayments, with the Bank of England expecting 3.9 million households will refinance onto higher rates over the next three years. Seeking advice in the first instance before buying or remortgaging will be essential to help borrowers navigate the mortgage maze,” she said.
