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Mortgage products top 6,000 but shelf life falls and rates rise

Mortgage products top 6,000 but shelf life falls and rates rise
Anna Sagar
Written By:
Anna Sagar
Posted:
12/03/2024
Updated:
12/03/2024

The total number of mortgage products has reached 6,004 this month, the largest number since 2008, but shelf life and pricing remain volatile.

According to the latest figures from Moneyfacts on total products, shelf life and pricing, the availability of products at the 90% loan to value (LTV) tier increased to its highest point in four years at 761.

At 95% LTV the total number of products comes to 318, which is up from 274 in February and almost double the figure from the same period last year.

The total number of products at 60% LTV have stayed roughly stable at 677, which is slightly up from 640 in the prior month and compares to 657 in March last year.

Mortgage rates rise while shelf life plummets

The average mortgage rates on two- and five-year fixed rates increased to 5.76% and 5.34% respectively.

This is up from 5.56% and 5.18% for an average two- and five-year fixed rate last month.

The average standard variable rate (SVR) is 8.18%, in line with 8.17% in February and up from 7.12% in March. It is just below the high of 8.19% recorded in November and December.

The average two-year tracker rate is 6.15%, stable with February’s figure and an increase from 4.84% last year.

The report noted that the shelf life of products stood at 15 days in March, the lowest in six months. It is higher than the lowest shelf life in Moneyfacts’ records of 12 days in July last year.

It is a decrease from 28 days in February, but is in line with figures from the same period last year.

‘All eyes are on the Monetary Policy Committee and their future rate-setting’

Rachel Springall, finance expert at Moneyfacts, said that mortgage product availability was “volatile” during February, as the average shelf life of a deal fell to a six-month low of 15 days.

She attributed this to lenders reacting to changes in swap rates, leading to several repricings of fixed rate deals.

“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, 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,” Springall added.

She continued on to say that mortgage choice reported its biggest month-on-month rise in six months, with product choice at higher-LTV tiers recording the largest growth.

“However, 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% and 95% LTV sit at 5.99%,” Springall said.

“As fixed mortgage rates rise, 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 an 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,” she said.

Related: Fixed rate mortgage fees rise and incentives fall