Data from the latest Moneyfacts UK Mortgage Trends Treasury Report shows that the total number of mortgage products available has risen to 7,158, an increase of 650 from the 6,508 options available a year ago. This represents the most choice seen by mortgage borrowers since October 2007, when 7,421 deals were on the market.
The surge in competition is being fueled by a combination of falling interest rates and a more stable economic outlook.
Average mortgage rates continue their slow downward trend
In other good news, fixed mortgage rates continue to fall, albeit slowly. The average two-year fixed-rate fell to 4.83% in January 2026, continuing a steady decline from the 5.48% recorded in January 2025. Meanwhile, the average five-year fixed-rate has fallen from 5.25% to 4.91% over the last year.
Tracker mortgages have seen more dramatic falls, largely due to successive cuts to the Bank of England Base Rate. The average two-year tracker rate now sits at 4.44%, down from 5.47% this time last year.
Small deposit mortgage rates fell the fastest
We continually monitor the best mortgage rates in the UK and update our best-buy tables. The table below illustrates the decline in the best two-year and five-year mortgage rates over the past 12 months. While the best two-year fixed-rates fell in line with the drop in average rates, the biggest drops have occurred among the highest loan-to-value (LTV) mortgages. The best two-year fixed mortgage rate for those with a 90% LTV has fallen by almost 1% over the last 12 months, compared to a drop of 0.64% for the equivalent mortgage with a 60% LTV.
This means that the gap between the best fixed-rates available for those with a 90% LTV and those with a 60% LTV has significantly narrowed over the last 12 months.
| Loan-to-value | Mortgage type | Rate in January 2025 | Rate in January 2026 | Change |
| 60% | 2-year fixed-rate | 4.17% | 3.53% | -0.64% |
| 60% | 5-year fixed-rate | 4.06% | 3.69% | -0.37% |
| 90% | 2-year fixed-rate | 4.94% | 3.96% | -0.98% |
| 90% | 5-year fixed-rate | 4.56% | 4.10% | -0.46% |
Relief for first-time buyers
The fact that the largest drop in fixed-rates over the last year occurred among mortgages with the highest LTVs is good news for first-time buyers, who typically have small deposits. Another encouraging aspect is the growth in products for those with smaller deposits. Product choice in the 90% and 95% Loan-to-Value (LTV) brackets is currently near an 18-year high, with 489 fixed-rate and variable rate deals available at 95% LTV compared to just 366 a year ago. This increase in choice, combined with a relaxation in stress testing and expectations for further base rate cuts, is expected to help ease the affordability constraints that have hampered many first-time buyers in recent years
The remortgage incentive
For the 1.8 million homeowners whose fixed-rate deals expire this year, the incentive to switch has intensified. The gap between the average Standard Variable Rate (SVR) of 7.25% and new fixed deals is substantial. According to Moneyfacts, a borrower moving from the average SVR to an average two-year fixed-rate at 60% LTV (4.28%) could save over £5,000 in repayments over a single year, based on a £250,000 mortgage over 25 years. However, homeowners who locked in historically low rates back in 2021, when many borrowers were on rates of 1% to 1.5%, will likely face a payment shock as they move onto higher current market rates.
How to source the best mortgage deal
It is essential to shop around for the best mortgage deals, especially with such a large choice of mortgage products available. For most borrowers, a mortgage broker is the most effective option because they provide a comprehensive view of the market and understand which loans suit specific types of individuals. They also have access to exclusive deals that aren't available directly to the public or listed online. Furthermore, a broker can help refine your application to ensure you don’t waste time with lenders who are unlikely to approve your request.
Some will charge a separate cost for the work, although you may find fee-free mortgage brokers. If you don’t already have a mortgage broker you can trust you can get a free mortgage review in 30 seconds* from a vetted FCA regulated mortgage professional.
Don't forget that you can secure a new fixed-rate mortgage deal four to six months before your current deal expires, which can act as a safety net in case mortgage rates increase in the meantime. However, your mortgage broker can still switch you to a cheaper product if rates continue to fall before your current mortgage deal expires.
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