Recent movement in the mortgage market may be encouraging for people planning to buy a property or reviewing how they will fund an upcoming move.
Figures reported by the HomeOwners Alliance show that the average two-year fixed mortgage rate fell by 0.16 percentage points in June 2026. The average five-year fixed rate also decreased, falling by 0.11 percentage points. Both rates finished the month at 5.52%, their lowest level since March 2026.
There was also a modest increase in the number of mortgage products available, which rose to 7,177.
A reduction in rates could give some borrowers the opportunity to access a more competitive deal. However, mortgage rates remain subject to change, and buyers should consider their borrowing arrangements alongside the wider legal and practical requirements of a property purchase.
Even where funding appears affordable, issues involving the mortgage offer, the lender’s valuation or a change in the buyer’s circumstances can affect whether the transaction is able to proceed as planned.
Obtain an agreement in principle
Before beginning a property search, it can be helpful to obtain a mortgage agreement in principle.
This provides an estimate of the amount a lender may be prepared to advance based on the initial financial information provided. It can help you understand your likely price range and may reassure sellers and estate agents that you have started arranging the necessary funding.
An agreement in principle is not the same as a confirmed mortgage offer. The lender will still need to consider a full application, assess your income and expenditure and carry out checks on the property you intend to purchase.
The amount ultimately offered may therefore differ from the initial indication.
Check the terms and validity of your mortgage offer
Once the lender has completed its assessment and is satisfied with the property valuation, it may issue a formal mortgage offer.
A copy will normally be sent to both you and your conveyancer. Your conveyancer must check the offer carefully and ensure that any legal requirements imposed by the lender are addressed before funds can be released.
Depending on the property, the lender may raise conditions relating to matters such as:
Mortgage offers usually remain valid for a limited period. The precise expiry date will be stated in the offer.
Property transactions can sometimes take longer than anticipated, particularly where there is a lengthy chain, delays in obtaining searches or unresolved legal issues. If the offer expires before completion, the lender may require further information, repeat certain checks or reconsider the application.
An extension may be available, but buyers should not assume that one will automatically be granted.
What if a better mortgage rate becomes available?
A buyer may find that mortgage rates have fallen after submitting an application or receiving an offer.
It may be possible to move to another product with the same lender or submit an application for a different deal. This will depend on the lender’s policies, the terms of the original product and the stage the transaction has reached.
Changing the mortgage product could result in a new or amended offer being issued. The lender may also need to repeat parts of its assessment, which could affect the proposed exchange or completion dates.
A mortgage adviser or lender can explain whether changing products is financially worthwhile. Your conveyancer should also be informed of any proposed change so that they can check the revised documents and confirm whether any additional lender requirements need to be satisfied.
Do not exchange contracts until the funding is confirmed
Exchange of contracts is a significant stage in a residential property purchase. It is the point at which the agreement becomes legally binding.
Once the exchange has taken place, the buyer is required to complete the purchase on the agreed date. Withdrawing from the transaction or failing to provide the purchase money can have serious financial consequences.
The deposit paid on exchange could be lost, and the seller may be entitled to claim interest or compensation for other losses arising from the failure to complete.
Before exchange, your conveyancer will need to be satisfied that:
Buyers should avoid agreeing fixed dates with the seller or estate agent before checking that their conveyancer and lender are able to meet them.
Report changes to your lender and conveyancer
A mortgage offer is based on the information available to the lender when it assesses the application.
A significant change before completion could affect the lender’s decision or the amount it is prepared to provide. It is therefore important to report relevant developments promptly rather than waiting until the transaction is close to completion.
Changes that may need to be disclosed include:
Your conveyancer must also carry out checks relating to the source of the money being used. You may be asked to provide bank statements, savings records, evidence of a property sale or documentation relating to a gifted deposit.
Gathering this information at an early stage can reduce the risk of outstanding checks delaying exchange or completion.
How could a down valuation affect the purchase?
The lender will usually arrange a valuation to decide whether the property provides sufficient security for the mortgage.
A down valuation occurs where the lender’s valuer considers the property to be worth less than the price agreed with the seller. If this happens, the lender may reduce the amount it is willing to advance.
The buyer may then need to consider whether they can:
Any reduction in the agreed price must be reported to the lender and reflected correctly in the contract and other legal documentation.
Buyers should also be aware that the lender’s valuation is primarily prepared for the lender’s benefit. It is not intended to provide a detailed assessment of the property’s condition.
A separate survey may identify structural defects, repair requirements or other issues that would not necessarily appear in a standard mortgage valuation.
Can an existing mortgage be transferred to a new home?
Homeowners moving from one property to another may be able to port their current mortgage product.
Porting generally means applying to use the existing mortgage deal in connection with the new property. It does not usually mean that the mortgage is transferred automatically.
The lender will normally assess the borrower’s current financial circumstances and decide whether the new property is acceptable security. A further application and valuation are therefore likely to be required.
Where the new property is more expensive, additional borrowing may be needed. That additional amount may be offered on different terms or at a different interest rate.
As part of the conveyancing process, the mortgage secured against the existing home will usually be repaid from the sale proceeds. Your conveyancer will then deal with the lender’s legal requirements for the mortgage over the new property.
Speaking to the lender or mortgage adviser early can help establish whether porting is suitable and whether moving could trigger an early repayment charge or other fee.
Preparing for a smoother purchase
Lower mortgage rates may improve the options available to some buyers, but the interest rate is only one part of arranging a property purchase.
The mortgage must remain valid, the lender’s conditions must be satisfied and the funds must be available when completion is due to take place. The buyer must also disclose any changes that could affect the application.
Problems can arise when a mortgage offer is approaching its expiry date, the lender has not been told about a change in circumstances or the buyer commits to a completion date before the legal and financial arrangements are ready.
Obtaining mortgage advice and instructing a conveyancer at an early stage can help ensure that the funding and legal work progress together. This can provide more time to address potential difficulties before they affect the proposed purchase.
The Residential Property team at stevensdrake can guide buyers through the conveyancing process, liaise with their lender and advise on the legal issues that arise during a purchase.
This article is intended to provide general information only. It does not constitute legal, financial or mortgage advice. Mortgage availability, interest rates and lending requirements will depend on the lender and the borrower’s individual circumstances.
Sarah joined stevensdrake in June 2022 as head of residential property having previously worked for over 17 years at a leading London law firm within their multi-award winning property department.
Having worked for over 20 years in the industry, Sarah has gained a wealth of experience in her field and has dealt with an extensive variety of complex property related legal matters.
Sarah advises a wide range of clients, including first time buyers, property investors, high net worth and ultra high net worth individuals, developers, companies and banks, on all aspects of residential property related matters including sales and purchases (both leasehold and freehold), transfers of equity, re-mortgages, deeds of variation, lease extensions, buy to let’s, shared ownership, Help to Buy, new-build developments and exchanges of land as well as providing general legal advice on property matters.
Sarah has built up a large network of clients and referrers alike and is regularly recommended by her clients to others with client satisfaction being a top priority.
Sarah is known for her friendly, approachable nature as well as her diligent practices, forward thinking, pro-active approach and pragmatic problem solving.
Sarah strives to provide a first class service to all clients and her goal is to make the whole process as stress free as possible.
stevensdrake © 2019 All Rights Reserved. Authorised and regulated by the Solicitors Regulation Authority Number 525527. *stevensdrake* and *stevensdrake solicitors* are trading names of stevensdrake limited (registered in England and Wales under number 7159192). A list of the directors is displayed at the above address. stevensdrake are authorised and regulated by the Financial Conduct Authority (FCA) for debt collection and insurance mediation. It is registered the FCA under registration number 702596.
