Mortgage availability falls as average five-year fixed surpasses 4%

mortgageThe latest data from the Moneyfacts UK Mortgage Trends Treasury Report shows that the average length of time for which mortgages remain on the market has plummeted to a new record low, while at the same time average rates have risen for a 10th consecutive month.

Plunging to a record low, mortgage products now only have an average shelf life of 17 days – four days fewer than our previous recorded low of 21 days (last seen in June 2022), giving borrowers their shortest chance yet to secure their chosen product.

At 4.08% the overall five-year fixed rate average has increased for a 10th successive month, surpassing 4% for the first time since October 2014 (4.08%). Following a monthly rise of 0.19%, this rate is now 1.44% above the equivalent rate recorded in December 2021 (2.64%).

The average overall two-year fixed rate has also risen for a 10th consecutive month. Now 3.95%, this has increased by 0.21% month-on-month and sits 1.61% higher than where the equivalent rate sat in December 2021 (2.34%) and is the highest we have recorded in over nine years (Feb 2013 – 4.09%).

The average Standard Variable Rate (SVR) has risen by 0.11% month-on-month to sit at 5.17%. This is the highest on Moneyfacts’ records since December 2008 (5.68%) having increased for eight successive months, which is the most consecutive month-on-month rises we have recorded for this rate. Compared to where this sat in December 2021, the average SVR has risen by 0.77%.

Mortgage market analysis
Aug-20 Aug-21 Dec-21 Jul-22 Aug-22
Fixed and variable rate products Total product count – all LTVs 2,526 4,660 5,315 4,556 4,407
All LTVs Average two-year fixed rate 2.08% 2.52% 2.34% 3.74% 3.95%
Average five-year fixed rate 2.34% 2.75% 2.64% 3.89% 4.08%
All LTVs SVR 4.44% 4.40% 4.40% 5.06% 5.17%
All products Shelf-Life (days) 29 21 26 23 17
Data shown is as at the first available day of the month, unless stated otherwise. Source: Moneyfacts Treasury Reports

Eleanor Williams, finance expert at Moneyfacts, said: “Following a statement from the FCA last week urging eligible borrowers to consider their mortgage options and switch to a more cost-effective deal in order to save money where possible, Moneyfacts data shows that those considering a new mortgage may wish to move swiftly to achieve this.

“Mortgage availability has dropped again this month, admittedly reducing at a less dramatic rate than recorded last month. August began with sight of 4,407 mortgages on offer, which is 149 fewer than were available at the start of July, meaning that the level of choice for borrowers has fallen again. Not only are there now fewer deals for borrowers to choose from, but the average shelf life for mortgage deals has plummeted to a new low of just 17 days this month. This reflects the speed at which providers are updating their offerings, but also means that those looking for a new mortgage have the shortest length of time we have ever recorded to try to secure their deal of choice.

“Would-be borrowers will also note that the rates on offer are continuing to climb. The average overall five-year fixed rate mortgage has breached 4% for the first time in nearly eight years, reaching 4.08% this month, a high not seen since October 2014 (4.08%). The average two-year overall rate, currently 3.95% after another month-on-month increase, is the highest recorded in over nine years (Feb 2013 – 4.09%). However, the average SVR has also climbed, this month rising by 0.11% to 5.17%, so while the differential between this and the average fixed rates now available has shrunk, it’s clear that those on, or about to revert to an SVR, could save on their monthly mortgage repayments if they are able to lock into a new fixed deal.

“The amount a borrower might be able to save on a new mortgage will depend on many factors, and it’s important consumers remember that average rates reflect what’s available across the whole of the market, and therefore there are still products offering even more competitive rates and packages on offer. The support and advice of a broker in finding the best option for an individual’s circumstance and in helping to assess their eligibility has likely never been more vital as the mortgage landscape remains extremely changeable.”

 

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