The total number of mortgage products on the market have nearly doubled year-on-year to 5,899 in January, a report has found.
According to Moneyfacts, this is the highest level since Mach 2008 when there were 6,192 products on the market.
It is also an increase of 200 compared to December last year and is up from 3,643 in January 2023.
The availability of deals at 95% loan to value (LTV) grew to its largest level since September 2022 at 270. This is an increase from 132 in January 2023 and from 253 at the end of last year.
At 90% LTV, the number of products rose from 718 to 733 between December and January and is up from 435 in January last year.
The product count at 60% LTV jumped from 623 to 682 month-on-month and is an increase from 484 in January last year.
The report continued that the average shelf life of a mortgage deal had gone up to 21 days, which is the longest timeframe since June 2023 when the shelf life stood at 22 days.
Regarding mortgage pricing, average mortgage rates for two and five-year fixed rates fell for the fifth month in a row.
The average two and five-year fixed rate came to 5.93% and 5.5% respectively, and the last time they dipped below six per cent was June 2023.
The average standard variable rate (SVR) now stands at 8.18%, which is 0.1% lower than December figures but up from 6.64% in January last year.
The average two-year tracker variable mortgage rate contracted month-on-month to 6.15% but is up from 4.48% in the same period last year.
Higher number of products and better pricing ‘great relief’ for borrowers
Rachel Springall, finance expert at Moneyfacts, said consecutive reductions to the overall average two and five-year fixed rates would be of “great relief for borrowers looking to refinance this year”.
She continued: “The volatility surrounding mortgage rate pricing eased, as the average mortgage shelf life rose from 17 days to 21 days, the highest figure recorded in over six months. There are big expectations for fixed mortgage rates to fall in the coming weeks, so some borrowers may choose to wait patiently for the right time to change their deal or buy their first home.”
Springall said those comparing different mortgage offers may be “pleased to see a big uplift in choice”, as products experienced the largest month-on-month increase since September 2023.
“A rise in choice and cheaper mortgage rates are promising signs for those looking to refinance this year. However, those coming off either a two or five-year fixed mortgage will be paying around three per cent more on their mortgage, based on our average rates, when they lock into a similar term for peace of mind. Despite this, it would be cheaper than reverting to an SVR, which charge over eight per cent on average,” she explained.
Springall continued that those with a limited deposit or equity were “benefiting from an increase in product choice and lower mortgage rates”.
She said while the availability at 95 per cent LTV had increased to its highest level since September and the average two and five-year fixed rates were their lowest since June last year, if borrowers could stretch their deposit to 10 per cent they would “find greater choice and cheaper rates”.
“Consumers would be wise to seek advice to assess the latest offers based on true cost and not be swayed by a headline grabbing rate,” Springall concluded.
