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Average mortgage shelf life falls to three-month low as rates rise – Moneyfacts

  • 10/06/2024
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Average mortgage shelf life falls to three-month low as rates rise – Moneyfacts
The average shelf life of a mortgage product dropped to 15 days in June, the shortest level of availability since March, product data showed.

The Moneyfacts UK Mortgage Trends Treasury Report found this was down from an average of 28 days in May, and shorter than the 22 days a mortgage product was available for in June last year. 

This coincided with a rise in average mortgage rates, coming to 5.93% for a two-year fix and 5.5% for a five-year fix.  

The gap between each option is 0.43%. 

These were only small increases compared to May, when the average two-year fixed rate was 5.91% and the average five-year fixed rate was 5.48%. 

Compared to June last year, mortgage rates were notably higher than the averages of 5.49% and 5.17% respectively. 

However, rates are lower than they were at the end of 2023, which saw the average two-year fixed rate sit at 6.04% in December, while the average five-year fixed rate was 5.65%. 


A small change 

Rachel Springall, finance expert at Moneyfacts, said: “Borrowers may feel disheartened to see another consecutive month of rises to the average two- and five-year fixed mortgage rates. However, both rose by a modest 0.02%, the smallest month-on-month rise this year. The incentive to fix for longer remains, with the average five-year fixed rate standing 0.43% lower than its two-year counterpart, and the incentive to remortgage is prevalent, as the average standard variable rate (SVR) stands at 8.18%.  

“Lenders spent the first few weeks of May repricing, in reaction to a volatile swap rate market, but the latter end of the month was more subdued, around the time the government announced there would be a General Election in July.” 


More high LTV options 

According to Moneyfacts, there was a rise in the number of mortgages on the market which went up from a count of 6,565 in May to 6,629 in June. 

There were also more mortgages on the market year-on-year, which totalled 4,967 in June 2023.  

There was more choice for borrowers with a small deposit, as the count of 95% loan to value (LTV) deals rose from 347 to 353 month-to-month. There was one additional option for mortgages at 90% LTV, rising from 791 to 792 in June. 

For products at the 60% LTV bracket, there were 733 options. This was lower than the 748 deals on the market in May. 

Springall added: “Despite the small uplift in rates, there was another rise in the overall product availability of residential mortgages, standing at its highest point in 16 years. As lenders reviewed their ranges, which included repricing, launches and withdrawals, the moves led to the average shelf-life of a mortgage plummeting to 15 days, down from 28 days at the start of May.  

“Year-on-year the overall availability of mortgages has risen by 1,662 deals, and within that pool of products, there are 156 more at 90% LTV and 124 more at 95% LTV. These rises are good news for borrowers who may be struggling to build a big enough deposit to secure a new deal. On the other end of the spectrum, there are just 98 more deals at 60% LTV, and month-on-month, there was a slight fall of 15 deals.” 


Lower variable mortgage rates 

The Moneyfacts data revealed that variable mortgage rates had fallen on average or stayed stable. 

In June, the average standard variable rate (SVR) was 8.18%, which was unchanged from the previous month and lower than the average of 8.19% recorded in December. 

However, this was still higher than the average of 7.52% last year. 

The average two-year tracker rate fell from 6.12% in May to 5.94% in June. This was up on the average of a year ago, which came to 5.32%. 


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