The past month has continued the positive trend for mortgage borrowers.

While the Bank of England chose to leave the base rate unchanged, mortgage rates have continued to fall as lender competition has intensified.

Rather than waiting for further base rate reductions, many lenders have continued to reduce mortgage pricing, creating a more competitive market for borrowers.

Bank of England and the Economic Backdrop

The Bank of England’s Monetary Policy Committee voted to keep the base rate at 3.75% at its latest meeting.

The decision was widely expected and reflected the Bank’s continued cautious approach as it balances inflation against wider economic conditions.

Following the decision, market commentators suggested that another month of stability should help provide greater confidence for both borrowers and lenders.

While future base rate cuts remain possible, the Bank continues to stress that any decisions will depend on incoming economic data.

Mortgage Rates Continue to Fall

Unlike the base rate, mortgage pricing has continued to move downwards throughout the month.

Towards the end of June, Santander reduced rates across parts of its mortgage range and reintroduced lower loan-to-value products for first-time buyers.

Further reductions followed from Barclays, NatWest, Santander and TSB, while Nationwide also reduced rates for the third time during June.

The downward trend continued into July, with Barclays announcing further reductions of up to 0.66%, alongside additional repricing from several other lenders.

Average Rates Reach Their Lowest Level Since March

According to Moneyfacts, average fixed mortgage rates have now fallen to their lowest level since March.

Moneyfacts also reported that June saw the biggest monthly fall in average mortgage rates since October 2024, reflecting the increasing competition between lenders.

At the same time, lenders have continued launching new products and repricing existing deals, giving borrowers a wider range of options than they have seen for several months.

Competition across the market remains particularly strong for borrowers with larger deposits or more equity in their property.

What This Means in Practice

The last few weeks have once again demonstrated that mortgage rates do not move directly in line with the Bank of England base rate.

Even though the base rate remained unchanged, lenders have continued reducing mortgage pricing as funding costs have improved and competition has intensified.

This has resulted in a market where:

• Fixed mortgage rates have continued to fall.
• Competition between lenders remains strong.
• More competitive products are becoming available across a wider range of loan to value bands.
• Borrowers have more choice than they have had for several months.

Our Thoughts

The key theme this month is growing competition.

While the Bank of England has maintained a cautious approach by leaving the base rate unchanged, lenders have continued to compete aggressively for new business by reducing mortgage rates.

This is encouraging news for borrowers approaching the end of a fixed rate or considering a move.

Although nobody can predict exactly what interest rates will do next, current market conditions highlight the importance of planning ahead.

Starting the process early can help borrowers understand their options, secure a suitable deal if appropriate and, depending on the lender and circumstances, potentially benefit if even better products become available before completion.

Information correct at time of writing – July 2026.

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