Mortgage deals experiencing their shortest shelf-life in six months, research shows
New research from Moneyfacts has found that deals are typically on offer for just 15 days before being withdrawn.
According to Moneyfacts, a financial information service, the rates mortgage deals are being pulled is down from 28 days which was experienced at the beginning of February 2024. The research, which was published yesterday, has come as a shock as homeowners and buyers are currently enjoying the widest range of options in 16 years.
Jo Jingree, a financial advisor at Mortgage Confidence, told the BBC: ‘When I recommend a rate – or sometimes a choice of rates – to a client, it’s quite understandable and unsurprising that they want time to consider which one to apply for.
‘Some lenders only give a few hours’ notice of a rate change. That creates a situation which is less than ideal because taking out a mortgage can be a huge financial commitment that could impact them for years to come.’
The new research shows that between the beginning of February and March, average rates for two and five-year fixed deals increased to 5.76% and 5.34%, respectively.
Commenting on the news, Rachel Springall, finance expert at Moneyfacts, said: ‘Mortgage product availability was volatile during February as the average shelf life of a deal plummeted to just 15 days, a six-month low.
‘Lenders reacted to the charge in swap rates, lending to numerous repricing of fixed rate deals, no doubt making it a challenging situation for borrowers and brokers to keep on top of the changes.
‘The rate volatility led to a rise in both the overall average two- and five-year fixed rates, the opposite direction borrowers may well have hoped for after positive rate cuts recorded a month prior.’
However, on a more positive note, Ms Springall added: ‘It is worth noting that fixed rates remain lower than at the start of 2024, and there are still some decent options available for borrowers to compare.’
Experts found that mortgage choice recorded the biggest month-on-month rise in six months, with mortgage options for borrowers overall breaching 6,000 – the largest count in 16 years.
In addition, borrowers with just a 5% deposit will also find a rise in choice, as there are now over 30 deals on the market at 95% loan-to-value, the highest count since June 2022.
With fixed mortgage rates rising, Ms Springall said: ‘Borrowers may wish to wait and see whether these rates come back down in the weeks to come, but they must keep in mind that there is still an incentive to switch away from a Standard Variable Rate (SVR).
‘All eyes are on the Monetary Policy Committee and their future rate setting, in conjunction with the swap rate market, as to whether mortgage rates will come down this year.’
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