Homeowners and buyers seeking a mortgage are being urged to act fast as prices are on the rise and product choice is reducing.
The number of mortgage product options made its biggest monthly fall since July 2023, with the number of deals diminishing from 6,645 in October to 6,402 in November, according to Moneyfacts.
Lenders have been pulling deals in the last few weeks and tweaking prices upwards in response to rising Swap rates, which they use to adjust their pricing.
According to Moneyfacts, the average two-year fixed rate has actually experienced a slight reduction in the last month, falling by 0.01% to sit at 5.39%. However, five-year fixed rates increased by 0.02% on average, to sit at 5.09%.
Meanwhile the typical ‘shelf life’ of a mortgage – the time it remains on the market – has dropped from 21 to 17 days meaning would-be borrowers have less time to take advantage of new deals.
These factors combined suggest there is volatility when it comes to the mortgage market and, despite interest rates being cut by the Bank of England last week, borrowers are unlikely to see mortgage prices follow this route.
Rachel Springall, finance expert at Moneyfacts, said: “Borrowers will be disappointed to see product volatility within the mortgage market, as choice plummeted and the shelf-life of a deal plunged to 17 days, down from 21 days month-on-month.
“These moves make it essential for prospective borrowers to act quickly to secure a new deal. There will be many borrowers coming off a cheap rate in the months ahead, so it’s imperative they seek a new offer and not default onto an expensive revert rate.
“A longer-term fixed deal may be popular for peace of mind, but borrowers may remain on the fence on fixing for longer.
“There are expectations that the Bank of England will bring down base rate further next year, but recent events have led to uncertainty on fixed rate pricing. Swap rates have been on the rise since the Budget and lenders will traditionally increase fixed rates in response.”
She added: “Lenders will no doubt be keeping a very close eye on the markets over the coming weeks and any borrowers concerned about mortgage affordability should seek independent advice with haste.
“As we have seen over the past month, mortgage deals are never guaranteed to last very long, and should this situation prolong, it poses a challenge for borrowers who are not quick off the mark.”
