You are here: Home - Mortgages - First Time Buyer - News -

Borrower choice halved as 2,700 mortgage deals pulled since March

Written by: Samantha Partington
Lenders have withdrawn almost 2,700 mortgage deals since the beginning of March, reducing borrower choice by close to 50%, Moneyfacts analysis revealed.

At 1 August, there were 2,526 mortgage products on the market, a drop of 2,696 since 1 March and a 202 product decline month-on-month.

And as banks’ mortgage ranges shrink, interest rates have begun to creep up.

Both the two- and five-year fixed average rates for all loan to values (LTV) have increased by 0.09% since the beginning of July, now 2.08% and 2.34% respectively.

Rates in the higher LTV tiers have increased more than those in the lower brackets.

The sharpest climbs can be seen at 85% LTV, with the average two-year fixed rate increasing by 0.21% this month, and the five-year equivalent climbing by 0.23%, now at 2.32% and 2.57% respectively.

Rates remain low

But compared to August 2019, rates are still low. The overall two-year fixed rate for all LTVs is 2.08%, 0.41% lower than it was in August of 2019.

Five-year fixed deals, now priced at 2.34% on average, are 0.50% lower this month than a year earlier.

Eleanor Williams, finance expert at Moneyfacts, said: “Until there is more certainty regarding the economic outlook and clarity around risk, which may well not become clear for some months particularly until the government furlough scheme winds down at the end of October, it seems unlikely that the mortgage sector will bounce back to the levels of availability that we saw six months ago.”

She added: “Those who have been waiting to see how the market moves may want to consider pursuing a new deal now and lock into a low rate before they potentially climb further.”

Last week, the Bank of England voted unanimously to keep the base rate at 0.1% and noted that banks had begun increasing rates on higher loan to value deals, where there is less competition, to rebuild squeezed margins.

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

Everything you wanted to know about ISAs…but were afraid to ask

The new tax year is less than a fortnight away and for ISA savers or investors, it’s hugely important. If yo...

Your right to a refund if travel is affected by train strikes

There have been a wave of train strikes in the past six months, and for anyone travelling today Friday 3 Febru...

Could you save money with a social broadband tariff?

Two-thirds of low-income households are unaware they could be saving on broadband, according to Uswitch.

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

DIY investors: 10 common mistakes to avoid

For those without the help and experience of an adviser, here are 10 common DIY investor mistakes to avoid.

Mortgage down-valuations: Tips to avoid pulling out of a house sale

Down-valuations are on the rise. So, what does it mean for home buyers, and what can you do?

Five tips for surviving a bear market mauling

The S&P 500 has slipped into bear market territory and for UK investors, the FTSE 250 is also on the edge. Her...

Money Tips of the Week