Average mortgage rates increased during July, reversing the reductions recorded a month earlier, according to Moneyfacts.

The Moneyfacts Average New Mortgage Rate rose by 0.12 percentage points from 5.47% at the beginning of July to 5.59% at the start of August.

Average 2- and 5-year fixed rates increased for the first time since April, rising by 0.11 and 0.14 percentage points respectively to 5.63% and 5.66%.

Moneyfacts attributed the reversal to rising swap rates as renewed unrest in the Middle East increased concerns about energy prices, inflation and the future path of Bank Rate.

DEALS LAST JUST 11 DAYS

Mortgage product repricing accelerated during July, with the average shelf-life of a deal falling by three days to 11 days.

This was the shortest period since April 2026, when heightened market volatility reduced average product availability to eight days.

Rachel Springall, finance expert at Moneyfacts, said: “Lenders were somewhat forced to U-turn on fixed-rate cuts in July, knocking back the short-lived progress of three consecutive months of reductions to the average two and five-year fixed rates.”

She added: “The limited timeframe makes it ever more essential to seek advice early, particularly for those who are due to remortgage this year.”

REMORTGAGE SHOCK AHEAD

Bank of England figures cited by Moneyfacts indicated that 750,000 households with fixed-rate deals expiring during 2026 were currently paying rates below 3%.

Those borrowers were expected to experience an average repayment increase of approximately £170 a month.

The incentive to remortgage remained significant because the average standard variable rate stood at 7.13%, despite falling from 7.42% a year earlier.

PRODUCT CHOICE CONTINUES TO RECOVER

Mortgage availability increased for a fourth consecutive month, rising by 180 products to 7,357 deals.

Moneyfacts estimated that 90% of the products withdrawn during March and April had now returned to the market.

Choice also improved at higher LTV tiers, although the average five-year fixed rate at 95% LTV moved above 6%.

Springall said: “There is always more room for improvement to the choice of deals in this sector, especially to draw in new business from first-time buyers, who remain the lifeblood of the mortgage market.”