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It's official - energy prices will fall by 17% on 1 July

New. Energy Price Cap calc: How much will YOUR bill be?

Plus... Should you fix?, new unit rates, bigger savings for prepay, and more...

At last, a little relief. From 1 July, energy bills drop by an average 17%, meaning for every £100 you pay today, you'll typically be paying £83/mth from July. This is because Ofgem is dropping the Price Cap below the Government's Energy Price Guarantee (EPG) for the first time since it was introduced last October. Here's what you need to know:

• New. Energy Price Cap calculator - what will your drop be? Use our What will I pay from July? calculator to enter how much energy you use, or how much you pay per month, and in what region, and it'll estimate what you'll pay from 1 July.
  
  
• Martin's video briefing: What the Energy Price Cap change means for you. Martin takes you through how much you'll pay, why standing charges aren't changing, new rates, direct debit, prepay, should you top up?, future predictions and more in his video explainer, if you'd rather watch.
  
  
• It is actually a cap on standing charges and unit rates. The Price Cap will fall to £2,074/yr for a typical direct debit household from 1 July to 30 September, undercutting the EPG rate which is currently set at £2,500/yr. But these figures are largely meaningless, as there is no total cap on bills - instead there are regional caps on the maximum standing charge and the unit rate firms can levy. We've full region-by region rates in our guide, but here are the average gas and electricity rates for direct debit...
  
  

  	New Energy Price Cap rates from 1 July	Current Energy Price Guarantee rates until 30 June
  Gas	Unit rate: 7.51p per kilowatt hour (kWh) Standing charge: 29.11p per day	Unit rate: 10.31p per kilowatt hour (kWh) Standing charge: 29.11p per day
  Electricity	Unit rate: 30.11p per kWh Standing charge: 52.97p per day	Unit rate: 33.21p per kWh Standing charge: 52.97p per day

  
  As standing charges aren't changing, the price drop is coming from unit rates. Electricity rates are falling by 3p to 30.1p/kWh, gas rates are dropping by just under 3p to 7.5p/kWh. As gas is the cheaper of the two fuels, electricity is effectively falling by around 10%, whereas gas is down by more than 25%. So electricity-only households will see a smaller reduction in bills, and high gas users will experience a bigger cut.
   
• You'll still pay £300/yr even if you use no energy. The moral hazard of high standing charges continues. It costs £300/yr just to have gas and electricity, so perversely, the less you use, the less you save. Martin challenged Ofgem boss Jonathan Brearley on this last week, and the regulator has launched a consultation which we'll be responding to.
  
  
• Prepay Price Cap rates will drop by 20% - more than direct debit. Those on prepay will pay slightly less than direct debit customers from July, with a combination of a reduction in unit rates from the Price Cap and a government subsidy to equalise rates. If you're a prepay user, you'll see prices drop by 20% as a result, so for every £100 you have been topping up, it'll cost you £80 from 1 July.
  
  With most prepayment meters - both smart meters and all gas meters - you pay the rate on the day you use energy. Yet with many non-smart, prepay electricity meters, you pay the rate on the day you top up. So aim to run your credit down to the minimum by 1 July when prices get cheaper. Then top up on 1 July, even just a quid, so you're then on the new lower rates. See Prepay help for more.
  
  
• Most will still be paying more for their energy than during this last winter. While the drop in energy bills will be a relief for millions, most will still be paying more for energy than during winter. This is because the drop in the rates won't make up for the £66/mth state support people got until April (unless you're a very high user). And overall, this still leaves people paying around double or more than they did before the energy crisis hit in October 2021 - unaffordable for many. See Help if you're struggling to pay to check all the support options now available.
  
  
• Warning. Some on fixed deals will see prices rise - consider ditching. Around a year ago, as prices rocketed, some switched to very high fixed-rate deals. Yet when the Government launched the EPG, it covered those on fixes so they'd pay the same as everyone else. From July, the EPG subsidy will fall away, so those fixes will go back up to their original price. If that's you, consider switching to a price-capped standard tariff.
  
  
• Should you fix your energy? Now there's some short-term price certainty, it may be the catalyst to restart deals. We've already seen a few limited existing customer-only deals, and we're expecting more soon. Based on current Price Cap predictions, it's worth considering a fixed deal if it's priced at not much more than the July Price Cap, especially if you value certainty. Full details in our Should I fix? guide, and we'll add all the latest deals as we hear about them.

Mortgage-holder alert

Rates are rising again, some are predicting there's worse to come... is NOW the time to fix?

Inflation's finally coming down, dropping from 10.1% to 8.7% in the last month. But the figures had a sting in the tail... buried within the headline rate was the fact that core inflation, which strips out energy and food prices, is still rising. And the mortgage market is now jittering at the prospect of further interest-rate hikes - as they're the key tool for the Bank of England to control rising prices.

Fixed mortgage deals tend to move in line with forecasts of future interest rates and, until recently, had been falling. Just last month, the cheapest two and five-year fixes were 4.08% and 3.79% respectively. But as the chart shows, the cheapest are now 4.39% and 4.05%, with some brokers predicting that the best such deals could get to 5% and 4.5% by mid-June.

With more than 1.4 million mortgage deals set to end this year, you need a plan - here's what you need to know:

• If you're on a variable rate or your mortgage is ending in the next six months, check now if you can lock in a new deal. Early action can insure against future rate rises...
  
  - Check if you can lock in a deal now so you're covered if rates do rise further. If you're six months or less away from your current mortgage ending, it's worth looking at what's available. Many lenders let you secure a new deal three to six months in advance. This means you could lock in today's rate as an insurance policy against rates rising, to start in the future when your current deal ends.
  
  And if rates do get cheaper again (some mortgage brokers believe that the hike in rates has been a short-term, knee-jerk reaction), you can often ditch a locked-in rate penalty-free if a better rate comes along in the meantime. This can be complex, so read full pros and cons in our long lock-in help.
  
  - On a tracker? Can you afford more rate rises? If the base rate goes up to 5.5% - as some City analysts predict - trackers are set to get a lot more expensive. So if you're already near the top of your budget, it may be time to consider fixing for surety of payments. See our full fixes vs trackers analysis for more help.
  
  

• Ready to go mortgage hunting? Step-by-step help. If you're nearing the end of your mortgage deal, download our free 62-page PDF Remortgage guide. This has FULL info on what a remortgage is and how it works. But in brief...

  1. Dig out the details of your current mortgage. Find out the rate you currently pay, monthly payments, the total you owe, if it's a fix or tracker, how long's left on the intro deal, how long's left in total, any early repayment charges and your loan-to-value (LTV) ratio (see LTV help).

  2. New. Use our comparison tool to see the cheapest deals, now with existing customer 'transfer' deals. Spend a few minutes on our Mortgage comparison tool to find your cheapest deal, which now includes an option to also see deals from your existing lender. These are worth considering, as there's less paperwork, fewer fees and you won't face further affordability checks if you're not borrowing more - a boon if you'll struggle to get accepted with a new lender (though do check the rate's good).

  3. Use our range of calculators to make it easy to compare deals. Plug your numbers in here...

  - Basic mortgage calculator - including what it'll cost
  - Compare two mortgages
  - Compare fixed-rate mortgages

  4. Get mortgage ready. A poor credit history can torpedo a remortgage application, so check your credit file (for free) to ensure there are no errors, then minimise other credit applications, and pay down debts if you can. For more tips, see 17 ways to boost mortgage acceptance.

  5. Use a mortgage broker to aid acceptance. Lenders do both credit and affordability checks (likely to be tougher to pass for some now due to the rising cost of living) that can kibosh applications. It's tough to know who'll accept you and how much you'll be able to borrow. Find a good mortgage broker and they'll have information on this that's very difficult for you to get yourself.
  
  And if you're searching early and locking in a rate as insurance, ask the broker whether you'd face any fees to leave the deal if you cancelled and opted for a cheaper deal down the line.

PS: A note for mortgage prisoners. We know that rate rises have been catastrophic for those unable to switch lender - last month we again highlighted the plight of mortgage prisoners stuck paying up to 8.5% with no prospect of a cheaper deal. We're campaigning hard for change, recently handing potential solutions to the Government, which it has promised to review. In the meantime, there's our Mortgage prisoners help guide, though sadly it's slim pickings.