The average shelf-life of a mortgage product dropped to 15 days in February, with lenders increasing fixed rates, the Moneyfacts UK Mortgage Trends Treasury Report data has revealed.
According to the research, average mortgage rates on the overall 2-year and 5-year fixed rate deals saw a rise last month, breaking six months of consecutive cuts.
Both rose to 5.76% and 5.34% respectively.
The average ‘revert to’ or standard variable rate (SVR) rose slightly by 0.01%, to 8.18%, just shy of the highest recorded of 8.19% during November and December 2023.
The average 2-year tracker variable mortgage remained at 6.15%.
In addition, overall product choice rose month-on-month, to 6,004 options, its highest level since March 2008.
The availability of deals at the 90% loan-to-value (LTV) tier (761) has increased to its highest point in four years.
Rachel Springall, finance expert at Moneyfacts, said: “Mortgage product availability was volatile during February as the average shelf life of a deal plummeted to just 15 days, a six-month low.
“Lenders reacted to the change in swap rates, leading to numerous repricing of fixed rate deals, no doubt making it a challenging situation for borrowers and brokers to keep on top of the changes.
“The rate volatility led to a rise in both the overall average 2- and 5-year fixed rates, the opposite direction borrowers may well have hoped for after positive rate cuts recorded a month prior.
“However, it is worth noting that fixed rates remain lower than at the start of 2024 and there are still some decent options available for borrowers to compare.”
She added: “Mortgage choice recorded the biggest month-on-month rise in six months, with mortgage options for borrowers overall breaching 6,000, the largest count in 16 years (March 2008 – 6,192).
“A deeper dive into the loan-to-value sectors reveals good news for borrowers with limited deposits.
“Indeed, product choice at 90% loan-to-value rose by 80 deals month-on-month, now at its highest count in four years (March 2020 – 779).
“This is a positive move, as choice dipped a month prior (February 2024 – 681).
“Those borrowers with just a 5% deposit will also find a rise in choice, as there are now over 300 deals on the market at 95% loan-to-value, the highest count since June 2022 (347).”
Springall continued: “However, prospective first-time buyers still have affordability challenges to overcome amid volatile house prices and a lack of affordable housing before they even consider that the average rates on a two-year fixed deal at 90% and 95% LTV sit at 5.99%.
“As fixed mortgage rates rise, borrowers may wish to wait and see whether these rates will come back down in the weeks to come, but they must keep in mind that there is still an incentive to switch away from a Standard Variable Rate (SVR).
“All eyes are on the Monetary Policy Committee and their future rate setting, in conjunction with the swap rate market, as to whether mortgage rates will come down this year.
“Borrowers would be wise to seek advice if they are looking for a new deal, particularly as the shelf life of a product remains so unpredictable.”
Nicholas Mendes, head of marketing at John Charcol, said: “Mortgage rates are continuously being repriced even to the extent we’ve seen lenders reprice twice in a week, with some lenders providing little to late notice of a rate change.
“The impact this has on the broker is very rarely spoken about as a mortgage broker is busy continuously looking to make sure clients secure the best possible deal.
“When a lender provides little notice there pulling rates at the end of the day or with a couple of hours’ notice, brokers need to act quickly to ensure clients documents are ready and applications submitted.
“This is why you often see brokers working late into the night to ensure submissions are done before the deadline – unable to attend family events and even into the weekends, resulting in a poor work-life balance.”
“Brokers do an amazing job, and the ability to adapt is now the norm.
“Brokers have called for a 24-hour rate notice pledge to help ensure clients are able to secure the best deal, which encompasses Consumer Duty.
“Unfortunately, mainly building societies have agreed with only NatWest being the only high street lender recently pledging to the 24 hours or provide as much notice as possible.”
