With average mortgage rate updates now becoming increasingly common within the media, many brokers have expressed concerns that a constant stream of intel may do more harm than good.
With a further interest rate hike announced by the Bank of England yesterday (22nd June), and will the cost-of-living continually on the rise, many fear that the ongoing fixation – particularly with 2-year fixed rates – may be verging on scaremongering for vulnerable borrowers.
Newspage asked brokers for their views on whether daily data was useful for consumers or unhelpful in the face of an already struggling mortgage market.
Reaction:
Rhys Schofield, director at Peak Mortgages and Protection:
“This kind of data is completely unhelpful, all the more so when yesterday I was securing rates in the mid-4% range.
“However, that’s not as sexy a headline and won’t get as many clicks.”
Ross McMillan, owner and mortgage adviser at Blue Fish Mortgage Solutions:
“The media obsession with ‘average’ rates on an almost daily basis is equivalent to Jim Bowen and his ‘let’s look at what you could’ve won’ taunt during Bullseye.
“Rates are changing constantly and without reference or context, headlines around these are misleading and dated and incredibly unhelpful to both borrowers and brokers.
“Bespoke, tailored and considered advice rather than clickbait and often contradictory headlines is what consumers require most in these volatile times and it’s hard to comprehend what positive objectives might be achieved by headline writers simply adding confusion and pouring fuel onto already dangerous fires.”
Matthew Jackson, director at Mint FS:
“This is the worst kind of sensationalist media reporting. I struggle to see the point, and would challenge the accuracy of these figures.
“Firstly, 2-year fixed rates make up only a small proportion of the mortgages we recommend, and at present they are priced higher than 5-year fixed products and variables.
“Only the higher loan-to-value products, or specialist products and lenders have rates significantly above 6%, so how is this average calculated?
“It feels like this is being used to whip up some panic. The reality is, don’t believe everything you read online or in the press. Pick up the phone and speak to a broker to get the whole story.”
Craig Fish, director at Lodestone Mortgages & Protection:
“While the data is true, it’s misleading and should always be caveated.
“There is no such thing as an average customer or average circumstances. Just this week we quoted 5.34% to a customer, and a rate starting with a four for a buy-to-let customer.
“These ‘averages’ are used to generate headlines, and serve no purpose other than creating panic.”
Jamie Elvin, director at Strive Mortgages:
“There is certainly an element of fear-mongering with the average 2-year fixed rate being quoted at 6%.
“There are plenty of 2-year fixed rate products available at less than 6% for those with larger deposits.
“However, for those with higher loan-to-values or applying for mortgages on non-standard terms, the 6% figure is a reality.”
Jonathan Burridge, founding adviser at We Are Money:
“It is total headline-grabbing nonsense.
“Rates are rising and that is of concern to many, but ‘average’ is such a dirty word because of the variables that determine the rate an individual borrower may access.”
Rob Gill, managing director at Altura Mortgage Finance:
“Borrowers should treat average mortgage rate data cautiously as the reality is often very different.
“With the average 2-year fixed rate currently reported as over 6%, several lenders still offer equivalent rates of around 5.3% for the right borrowers.
“While the average data may reflect the trend accurately, the figures themselves are often misleading.”
