Product numbers are substantially higher than two years ago, as choice was significantly affected in the aftermath of the fiscal announcement
Mortgage product choice overall dropped month-on-month, to 6,402 options, the biggest month-on-month decline since July 2023, according to the latest Moneyfacts UK Mortgage Trends Treasury Report.
Product numbers are substantially higher than two years ago, as choice was significantly affected in the aftermath of the fiscal announcement (November 2022 – 3,117).
The data also reveals that the average shelf-life of a mortgage product declined to 17 days, down from 21 days a month prior.
Additionally, average mortgage rates on the overall two-year fixed rate dropped by 0.01% and the five-year fixed rate increased by 0.02% to 5.39% and 5.09% respectively. The average two-year fixed rate is 0.30% higher than the five-year equivalent. The two-year fixed rate has now been higher than the five-year equivalent since October 2022.
The average two-year tracker variable mortgage increased slightly to 5.71%.
The average ‘revert to’ rate or SVR dropped to 7.95%. In comparison, the highest recorded was 8.19% during November and December 2023.
Rachel Springall, finance expert at Moneyfacts, said: Borrowers will be disappointed to see product volatility within the mortgage market, as choice plummeted and the shelf-life of a deal slumped to 17 days, down from 21 days month-on-month. These moves make it essential for prospective borrowers to act quickly to secure a new deal. There will be many borrowers coming off a cheap rate in the months ahead, so it is imperative they seek a new offer and not default onto an expensive revert rate.
A longer-term fixed deal may be popular for peace of mind, but borrowers may remain on the fence on fixing for longer. There are expectations that the BoE will bring down base rate further next year, but recent events have led to uncertainty on fixed rate pricing. Swap rates have been on the rise since the Budget and lenders will traditionally raise fixed rates in response, she said.
