Report finds mortgage shelf life plunging to a new low
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, the latest data from the Moneyfacts UK Mortgage Trends Treasury Report has shown.
Dropping to a record low, mortgage products now only have an average shelf life of 17 days – four days fewer than the previous low of 21 days, 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, when it was also at 4.08%. Following a monthly rise of 0.19%, this rate is now 1.44% above the equivalent rate of 2.64% recorded in December 2021.
The average overall two-year fixed rate has also risen for a 10th consecutive month. Now at 3.95%, this rate has increased by 0.21% month-on-month and sits 1.61% higher than where the equivalent rate sat in December 2021, and is the highest Moneyfacts has recorded in over nine years, when the rate was 4.09% in February 2013.
The average standard variable rate (SVR) has risen by 0.11% month-on-month to sit at 5.17%. This is the highest since December 2008, when the rate was 5.68%, having increased for eight successive months, which is the most consecutive month-on-month rises recorded for this rate. Compared with the rate in December 2021, the average SVR has risen by 0.77%.
“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,” Eleanor Williams, finance expert at Moneyfacts, said.
“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.”
Williams also stressed that would-be borrowers have to consider that the rates on offer are continuing to climb too.
“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,” she said.
“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.”