Moneyfacts UK Mortgage Trends Treasury Report data reveals the number of mortgage options for borrowers has risen to its highest level since February 2022 and the average shelf life of a mortgage deal has stabilised.
- Product choice rose month-on-month to 5,338 options, the highest count since February 2022 (5,356) and more than double the availability seen in October 2022. Within the individual loan-to-value (LTV) tiers, following month-on-month rises, options within the 85% LTV tier are at their highest levels on Moneyfacts’ records. This may well suggest more stability in choice across the market. The average shelf life of a mortgage product rose to 15 days; the lowest on Moneyfacts’ records was 12 days in July 2023. The average shelf life in October 2022 was 15 days.
- Both the average two- and five-year fixed rates fell between the start of August and the start of September, to 6.70% and 6.19% respectively. The average two-year fixed rate stands at 0.51% higher than the average five-year equivalent.
- The average two-year tracker variable mortgage rate rose month-on-month to stand at 6.25%.
- The average ‘revert to’ rate or Standard Variable Rate (SVR) continued to climb. At 8.09%, this rate is at its highest level on Moneyfacts’ electronic records (starting July 2007).
| Mortgage market analysis | ||||||
| Sep-21 | Sep-22 | Mar-23 | Aug-23 | Sep-23 | ||
| Fixed and variable rate products | Total product count – all LTVs | 4,812 | 3,890 | 4,372 | 5,056 | 5,338 |
| Product count – 95% LTV | 283 | 274 | 161 | 226 | 243 | |
| Product count – 90% LTV | 579 | 513 | 546 | 586 | 632 | |
| Product count – 60% LTV | 587 | 471 | 657 | 513 | 532 | |
| All products | Shelf life (days) | 28 | 28 | 16 | 13 | 15 |
| All LTVs | Average two-year fixed rate | 2.38% | 4.24% | 5.32% | 6.85% | 6.70% |
| Average five-year fixed rate | 2.63% | 4.33% | 5.00% | 6.37% | 6.19% | |
| 95% LTV | Average two-year fixed rate | 3.57% | 4.51% | 5.85% | 7.10% | 6.91% |
| Average five-year fixed rate | 3.83% | 4.51% | 5.33% | 6.41% | 6.25% | |
| 90% LTV | Average two-year fixed rate | 2.85% | 4.27% | 5.50% | 6.81% | 6.66% |
| Average five-year fixed rate | 3.23% | 4.24% | 4.99% | 6.23% | 6.04% | |
| 60% LTV | Average two-year fixed rate | 1.51% | 3.92% | 5.01% | 6.62% | 6.43% |
| Average five-year fixed rate | 1.71% | 4.03% | 4.76% | 6.16% | 5.91% | |
| All LTVs | Standard Variable Rate (SVR) | 4.41% | 5.40% | 7.12% | 7.85% | 8.09% |
| All LTVs | Average two-year tracker rate | 2.25% | 3.33% | 4.84% | 6.02% | 6.25% |
| Data shown is as at the first available day of the month, unless stated otherwise. | ||||||
| Source: Moneyfacts Treasury Reports | ||||||
Rachel Springall, Finance Expert at Moneyfacts, said:
“Mortgage product choice has grown to its highest level since February 2022 and average rates are gradually falling. This positive momentum has resulted in the average shelf life of a mortgage product rising to 15 years, up from a record low of 12 days in July. It was a busy summer for lenders, as they moved to cut fixed rates and launch new deals to entice borrowers. A notable area of growth in the loan-to-value (LTV) spectrum was for borrowers who have a 15% deposit or level of equity (85% LTV), as choice in this sector rose by 74 deals, to stand at an all-time high on Moneyfacts’ records, standing at 868 products.
Those borrowers who are about to come off a fixed rate deal or are sitting on their revert rate may now wish to explore their options to refinance, particularly as the average Standard Variable Rate (SVR) stands at a record high of 8.09%. As average fixed rates start to fall and the average SVR rises, the incentive to lock into a fixed rate deal increases. The average two-year fixed rate in September 2021 stood at 2.38% and, based on a £200,000 mortgage over 25 years, monthly mortgage payments at this rate would have been £885. The equivalent payment at today’s average SVR of 8.09% would be £1,556, a near £700 monthly increase. As average fixed rates remain at levels not seen since the years following the 2007 financial crisis, borrowers may wish to consider other options, such as tracker mortgages, so seeking advice to navigate deals is essential.
It will be interesting to see how the mortgage market improves in the weeks to come, particularly if SWAP rates fall, as lenders may then cut their fixed rate deals as a result. As we have seen before, a volatile interest rate market can have a significant impact on lenders’ pricing strategies. Borrowers concerned about the affordability of their mortgage will be keen to see stability in product choice and for fixed rates to fall further before they refinance. There are some attractive deals out there with incentive packages to choose from, which may be a more cost-effective choice than a low-rate fixed deal.”
