The average shelf-life of a mortgage product has hit a six-month low, despite homeowners and buyers currently enjoying the widest range of options in 16 years.
According to Moneyfacts data, mortgage offers are typically available for 15 days before being withdrawn. This is down from 28 days at the start of February.
Nicholas Mendes at independent mortgage advisor John Charcol said: “Mortgage rates are continuously being repriced even to the extent, we’ve seen lenders reprice twice in a week, with some lenders providing little to late notice of a rate change.”
This adds significant pressure on borrowers having a short time to decide on a deal while interest rates remain volatile.
Average mortgage rates for both two- and five-year fixed-rate deals increased this month, ending a streak of six consecutive months of cuts.
Between the beginning of February and the beginning of March, average rates for two- and five-year fixed deals rose to 5.76 percent and 5.34 percent, respectively.
Meanwhile, the average two-year fixed rate stands 0.42 percent higher than the five-year equivalent.
Rachel Springall, finance expert at Moneyfacts, commented: “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 change in swap rates, leading 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, 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.”
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.
Ms Springall said a deeper dive into the loan-to-value sectors also reveals “good news” for borrowers with limited deposits.
She said: “Indeed, product choice at 90 percent loan-to-value rose by 80 deals month-on-month, now at its highest count in four years. This is a positive move, as choice dipped a month prior.”
Borrowers with just a five percent deposit will also find a rise in choice, as there are now over 300 deals on the market at 95 percent loan-to-value, the highest count since June 2022 (347).
However, Ms Springall continued: “Prospective first-time buyers still have affordability challenges to overcome amid volatile house prices and a lack of affordable housing before they even consider that the average rates on a two-year fixed deal at 90 percent and 95 percent LTV sit at 5.99 percent.”
As fixed mortgage rates rise, Ms Springall noted: “Borrowers may wish to wait and see whether these rates will 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.
“Borrowers would be wise to seek advice if they are looking for a new deal, particularly as the shelf life of a product remains so unpredictable.”
The Monetary Policy Committee will next review the Bank of England’s Base Rate on March 21.
