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Mortgage rate shelf life falls to 21 days as lenders compete on price

  • 16/08/2021
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Mortgage rate shelf life falls to 21 days as lenders compete on price
The average availability of a mortgage rate has fallen to 21 days, the shortest timeframe since 2017, giving borrowers limited time to apply for a deal.


According to Moneyfacts, the average shelf life of a mortgage has been gradually falling from 48 days in August 2019 to 29 in August 2020.

Moneyfacts finance expert Eleanor Williams said it was due to rate-repricing between lenders as they competed with each other to attract new business.

“Borrowers considering their mortgage options may find that products have a limited period when they are available so having the up-to-date market knowledge of a qualified adviser could be invaluable in ensuring they can secure their chosen product in time,” she said.

The total number of mortgage products available has increased for the tenth consecutive month to 4,660 in August, up 84 per cent on the same period last year and the highest since March 2020.

The data analysis firm said that availability had recovered to around 93 per cent of the level seen in August 2019.

Availability in the lower and mid loan to value (LTV) tiers has rebounded, with product choice in the 80 and 85 per cent LTV ranges increasing by 152 and 22 products respectively since August 2019.

Product choice for 90 and 95 per cent LTVs has also increased by 25 and 22 products respectively since last month.

Williams added lenders’ appetite was returning which was partially attributed to the Mortgage Guarantee Scheme. However product choice was still below pre-pandemic levels as there were 199 fewer deals in the 90 per cent LTV band and 116 fewer deals in the 95 per cent LTV bracket than in August 2019.

Average rates for two and five-year fixed rates have fallen for the second consecutive month to 2.52 per cent and 2.75 per cent respectively.

This is the lowest level for a two-year fixed rate since January this year and lowest average rate for a five-year fixed rate since March.

Williams said: “These falls are perhaps fuelled not only by the growing number of lenders launching sub-one per cent deals predominantly in the lower LTV tiers, but we have also seen rate re-pricing across the higher LTV lending brackets, particularly at 90 per cent LTV where the two-year fixed average fell by 0.14 per cent and the five-year by 0.13 per cent this month alone.”

The average rate for a two-year fixed rate at 95 per cent LTV has also fallen by 0.1 per cent from last month to 3.69 per cent, whilst its five-year fixed rate has gone down by 0.08 per cent to 3.93 per cent.

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