Mortgage deals are being pulled off the market at breakneck rates as global turmoil is leading to lenders pulling deals at speed.
The average shelf life of a mortgage is now just 14 days, compared with 33 in February. The last time it was as short as this was in August 2023, and even when Liz Truss’ ‘mini Budget’ created huge uncertainty in the market in October 2022, the average shelf life of a mortgage was 15 days.
Data service Moneyfacts said the change was due to uncertainty in the Middle East, which has created a “notable shift in swap rates”, meaning that expected cuts to the Bank of England base rate might be delayed.
Rachel Springall, Moneyfacts’ finance expert, said: “The reason rests on the uncertainty surrounding tensions in the Middle East; this puts pressure on inflation, gilts and, as a casualty, swap rates – the latter drives the cost of fixed rate mortgages.”
Despite the speedy demise of many rates, there are still a huge number of products on the market, Springall said.
Overall product choice dipped month-on-month but remained above 7,000 options.
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“Lenders may well pull more products until the future path of interest rates becomes clearer, but choice typically bounces back after short-term unrest,” Springall added.
Average mortgage rate rises
The Moneyfacts figures showed a slight rise in the average mortgage rate for many products, with the average five-year fixed rate up to 4.96% from 4.94% for all loan to values (LTVs). Those with smaller deposits are more likely to be affected by the rises, with the average rate for a 95% LTV fixed rate mortgage being 5.47%, up from 5.41%.
However, rates for two-year fixes fell slightly on average for all LTVs, down from 5.45% to 5.42%.
The rises were backed up by figures from Rightmove’s mortgage tracker, which showed the average two‑year fixed rate has risen to 4.51% from 4.24% the week before, as lenders respond to geopolitical uncertainty.
Colleen Babcock, mortgage expert at the online property search portal, said: “This increase underlines how sensitive the mortgage market is to changes in inflation expectations and geopolitical risk.”
