Choice of mortgage deals shrinks at fastest pace since May 2020
The number of available mortgage deals took a ‘nosedive’ in March, according to Moneyfacts.co.uk.
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Your support makes all the difference.The choice of mortgages has shrunk at the sharpest pace since the early stages of the coronavirus pandemic, analysis has found.
Mortgage borrowers have around 518 fewer products to choose from than they did in February, according to Moneyfacts.co.uk.
This is the largest month-on-month drop since May 2020, when there were 626 fewer deals to choose from than the previous month.
Mortgage rates are also on the increase. The average standard variable rate (SVR) was 4.46% in February but now it stands at 4.61%.
The 0.15 percentage point increase is the biggest monthly rise that Moneyfacts has on its records.
The level of product choice took a nosedive this month
People end up on a lender’s SVR once their initial mortgage deal comes to an end.
Moneyfacts said the incentive to switch for those on an SVR remains clear, with the average two-year fixed rate mortgage having a rate of 2.65% and the average five-year fix at 2.88%.
The fixed rates on the market have also been on the increase though. Moneyfacts said the average two-year fix is the highest since November 2015 and the average five-year fix is the highest since April 2019.
Eleanor Williams, a finance expert at Moneyfacts, said: “The level of product choice took a nosedive this month, reducing by 518 deals to leave 4,838 deals for borrowers to choose from.”
She said the average mortgage product now has a “shelf life” of less than a month, staying on the market for 28 days typically – “giving prospective mortgage customers just a short period to secure their chosen deal”.
First-time buyers with 5% deposits may find they have slightly more product choice however.
Ms Williams said: “The only LTV (loan-to-value) tier where product availability improved was at 95%, which saw an uplift of seven deals, bringing the total to 342.”
The average two-year fixed rate for someone with a 5% deposit crept up from 3.05% in February to 3.11% in March. The average five-year fixed rate in this bracket increased from 3.35% to 3.37%.