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Borrower blues: Mortgage choice plummets by almost 800 deals in just one week

Nick Cheek
Written By:
Nick Cheek

The total residential mortgage count for fixed and variable product deals has decreased by around 373 in a week to 5,012, according to a financial product data provider.

According to Moneyfacts figures, on the residential side major banks and building societies including such as Halifax, Bank of Ireland, Bath Building Society, Furness Building Society, Principality Building Society and Scottish Building Society pulled selected fixed mortgage products over the past few days.

It added that Aldermore, Foundation Home Loans and Tipton and Coseley Building Society have removed their entire fixed rate range.

Moneyfacts said that the total mortgage product count was still more than double the figure of 2,258 in October 2022, when the mini Budget led to mass product withdrawals.

It is also in line with figures from May last year when in total there were around 5,087 products on the market.

The firm added that the average rate for its two-year fix was 5.38%, up from 5.34% last year.

Its average five-year fixed rate comes to 5.05%, up from 5.01% last week.

Rachel Springall, finance expert at Moneyfacts, said: “Borrowers searching for a new deal may well be concerned about the latest developments in the mortgage market. Over the past few days, we have seen a few lenders withdraw selected fixed products, with some pulling out of the market, at least temporarily.

“Product choice has started to fall, and as may be expected, average fixed mortgage rates are on the rise. This volatility is down to the concerns surrounding future interest rate hikes, and lenders are reassessing propositions.”

She added: “Consumers looking to refinance will find rates around five per cent on average for a fixed deal, compared to around three per cent a year ago. It is vital borrowers seek advice to assess the situation and to find a mortgage that suits their circumstances.”

Buy-to-let choice contracts by over 400 in a week

Moneyfacts continued that buy-to-let product choice, which includes fixed and variable rate deals at all loan to value (LTV) tiers, had contracted from 2,748 last week to 2,343 this week.

This is down from 3,374 in May last year but up on the 988 products available in October last year.

Moneyfacts said Aldermore, Bank of Ireland, CHL Mortgages, Fleet Mortgages, Foundation Home Loans and The Mortgage Lender had withdrawn their entire fixed rate buy-to-let range.

The average two-year buy-to-let fixed rate is 5.61%, up from 5.58% this time last year.

On the five-year buy-to-let fixed rate side, the average rate stands at 5.52%, a nudge up from 5.5% last week.

Springall noted: “Landlords will be disappointed to see a drop in product choice and that average fixed rates are on the rise. The volatility surrounding interest rates towards the tail end of 2022 started to improve, but as it stands, average rates are expected to keep climbing because of the ongoing concerns over future interest rate hikes.”

“Buy-to-let product choice dropped below 1,000 deals in October last year, in the aftermath of the fiscal announcement, so it will be a concerning echo of that period if choice plummets to such a low again. Interest rates are only part of the decision-making process when entering a buy-to-let investment, so it is always wise to seek advice to ensure it is the right time to commit to a deal.”