THE PROPERTY FILTER TAKE
Both the average two-year and five-year fixed rates dropped to 5.52% in July 2026 - falls of 0.16% and 0.11% respectively, the sharpest monthly reductions since October 2024 (Moneyfacts, 13 July 2026).
On a £200,000 interest-only BTL (buy-to-let) mortgage, the two-year fix drop saves around £27 a month; the five-year fix drop saves around £18 a month.
With product choice now at 7,177 deals and rising, you may wish to speak to your broker about whether fixing now makes sense before the next pricing cycle.
Two- and five-year fixed rates have both fallen to 5.52%, according to Moneyfacts (13 July 2026). That is the biggest monthly fall in 21 months - rates have not dropped this sharply in a single month since October 2024. The two-year fix fell 0.16 percentage points. The five-year fell 0.11 percentage points.
What the Numbers Show
The previous comparable falls came in October 2024, when the two-year average dropped 0.16% and the five-year dropped 0.13%, per Moneyfacts. Both rates now sit at their lowest since the start of March 2026.
The overall average new mortgage rate - which spans fixed and variable products - fell 0.12% to 5.47% in July 2026, its biggest monthly fall since March 2025 (Moneyfacts, 13 July 2026).
Product choice also expanded for a third consecutive month. Lenders added 45 deals, bringing the total to 7,177 mortgage options (Moneyfacts, 13 July 2026). Borrowers with a 10% deposit at 90% LTV (loan-to-value) now have over 900 products available for the first time since March 2026.
More deals and lower rates together signal that lenders are competing for business. That is good news if you are reviewing your portfolio's financing right now.
What This Costs You Per Month
Let me run the numbers on a typical BTL (buy-to-let) scenario. Take a £200,000 interest-only mortgage - standard across much of the BTL market.
At last month's average two-year fixed rate of 5.68%, monthly interest came to roughly £947. At this month's 5.52%, it drops to around £920. That is a saving of around £27 a month, or £324 a year.
On the five-year fix, the 0.11 percentage point drop brings the monthly saving to around £18 - roughly £220 over the course of a year.
Neither figure will transform a deal on its own. But across a portfolio of four properties on the two-year fix, that adds up to over £1,200 a year in reduced financing costs.
Before your next acquisition, consider checking how the current rates affect your ICR (interest coverage ratio). That is the ratio of rental income to mortgage payments that most lenders require you to pass at a stressed rate. The BTL lender stress test calculator makes that check straightforward.
What to Watch Next
This is the second consecutive month of falls. The October 2024 precedent is worth noting - rates continued falling for several months after that before stabilising. There is no guarantee the same pattern repeats, but the direction is clear.
Lender criteria can tighten quickly when applications surge on the back of rate cuts. Our negotiation and finance guide covers how to position your application when competition for deals picks up.
If you are weighing a refinance or a new purchase, you may wish to review how the current environment stacks up against your property investment strategy before the next pricing cycle.
Run the numbers on your specific deal through the free calculators first - then speak to your broker with a clear picture of what the rate change is actually worth to you.
The Bank of England's next Monetary Policy Committee decision remains the key variable. Any shift in base rate expectations will move swap rates, and swap rates drive fixed mortgage pricing.
Key takeaways
Average two-year fixed rates fell 0.16 percentage points to 5.52% in July 2026 - the biggest monthly drop since October 2024 (Moneyfacts, 13 July 2026)
Average five-year fixed rates fell 0.11 percentage points to 5.52%, also the sharpest monthly fall since October 2024 (Moneyfacts, 13 July 2026)
On a £200,000 interest-only BTL mortgage, the two-year rate drop saves around £27 a month; the five-year drop saves around £18 a month
Product choice grew to 7,177 deals - a third consecutive month of expansion (Moneyfacts, 13 July 2026)
You may wish to speak to your broker about whether fixing now makes sense for your portfolio before rates reprice
Two- and five-year fixed rates have both fallen to 5.52%, according to Moneyfacts (13 July 2026). That is the biggest monthly fall in 21 months - rates have not dropped this sharply in a single month since October 2024. The two-year fix fell 0.16 percentage points. The five-year fell 0.11 percentage points.
What the Numbers Show
The previous comparable falls came in October 2024, when the two-year average dropped 0.16% and the five-year dropped 0.13%, per Moneyfacts. Both rates now sit at their lowest since the start of March 2026.
The overall average new mortgage rate - which spans fixed and variable products - fell 0.12% to 5.47% in July 2026, its biggest monthly fall since March 2025 (Moneyfacts, 13 July 2026).
Product choice also expanded for a third consecutive month. Lenders added 45 deals, bringing the total to 7,177 mortgage options (Moneyfacts, 13 July 2026). Borrowers with a 10% deposit at 90% LTV (loan-to-value) now have over 900 products available for the first time since March 2026.
More deals and lower rates together signal that lenders are competing for business. That is good news if you are reviewing your portfolio's financing right now.
What This Costs You Per Month
Let me run the numbers on a typical BTL (buy-to-let) scenario. Take a £200,000 interest-only mortgage - standard across much of the BTL market.
At last month's average two-year fixed rate of 5.68%, monthly interest came to roughly £947. At this month's 5.52%, it drops to around £920. That is a saving of around £27 a month, or £324 a year.
On the five-year fix, the 0.11 percentage point drop brings the monthly saving to around £18 - roughly £220 over the course of a year.
Neither figure will transform a deal on its own. But across a portfolio of four properties on the two-year fix, that adds up to over £1,200 a year in reduced financing costs.
Before your next acquisition, consider checking how the current rates affect your ICR (interest coverage ratio). That is the ratio of rental income to mortgage payments that most lenders require you to pass at a stressed rate. The BTL lender stress test calculator makes that check straightforward.
What to Watch Next
This is the second consecutive month of falls. The October 2024 precedent is worth noting - rates continued falling for several months after that before stabilising. There is no guarantee the same pattern repeats, but the direction is clear.
Lender criteria can tighten quickly when applications surge on the back of rate cuts. Our negotiation and finance guide covers how to position your application when competition for deals picks up.
If you are weighing a refinance or a new purchase, you may wish to review how the current environment stacks up against your property investment strategy before the next pricing cycle.
Run the numbers on your specific deal through the free calculators first - then speak to your broker with a clear picture of what the rate change is actually worth to you.
The Bank of England's next Monetary Policy Committee decision remains the key variable. Any shift in base rate expectations will move swap rates, and swap rates drive fixed mortgage pricing.
Key takeaways
Average two-year fixed rates fell 0.16 percentage points to 5.52% in July 2026 - the biggest monthly drop since October 2024 (Moneyfacts, 13 July 2026)
Average five-year fixed rates fell 0.11 percentage points to 5.52%, also the sharpest monthly fall since October 2024 (Moneyfacts, 13 July 2026)
On a £200,000 interest-only BTL mortgage, the two-year rate drop saves around £27 a month; the five-year drop saves around £18 a month
Product choice grew to 7,177 deals - a third consecutive month of expansion (Moneyfacts, 13 July 2026)
You may wish to speak to your broker about whether fixing now makes sense for your portfolio before rates reprice
Frequently asked questions
Frequently asked questions
What are the current average fixed mortgage rates in the UK?
How does a 0.16% rate drop affect monthly BTL mortgage payments?
What is an ICR and why does it matter for BTL investors?
Will fixed mortgage rates keep falling?
