House hunters and other borrowers from a variety of lenders have nearly 1,000 fewer mortgage deals to choose from than a year ago, as more than 500 deals simply disappeared since last month.
The number of fixed and variable rate home loans available fell to 3,890 – the lowest level since April 2021, Moneyfacts.co.uk reported today.
An estimated 517 more home mortgages were available in September than the total number calculated by Moneyfacts just a month earlier, in August.
Back in September of last year, there were 4,812 mortgage deals available – 922 deals more than this month.
There are also 1,425 fewer mortgages now than there were at the start of December 2021, before the Bank of England’s recent base rate hike.
Moneyfacts said the drop in the choice of mortgage products available came across a range of deposit sizes.
Although the choice of mortgage deals is narrowing, it may still be worth it for borrowers to see if they can get a cheaper deal as the average Standard Variable Rate (SVR) is now at its highest in more than a decade.
People get their lender’s SVR when their original mortgage deal comes to an end.
The average SVR is now 5.40 percent, the highest since December 2008.
Looking at how rates are rising across the board, Moneyfacts said the average two-year fixed-rate mortgage for all deposit sizes was 4.24 per cent, the highest since January 2013.
The average five-year fixed rate of 4.33 percent is the highest since November 2012.
Even more positive for borrowers is that the average “lifetime” of a mortgage loan is increasing.
The average mortgage deal typically stays on the market for 28 days, compared to an all-time low for Moneyfacts of 17 days in August.
However, Moneyfacts said that given the significant number of products that were also withdrawn, this could simply be a sign that lenders are tightening and tightening their ranges.
Eleanor Williams, financial expert at Moneyfacts, said rising mortgage rates “can be disappointing for many, particularly those on a two-year fixed rate agreement who may be concerned that the overall average rate is 4.24 per cent. the rate is now 2.00 percentage points higher than at the time of the deal (in September 2020, the average rate was 2.24 percent).”
That average increase could be more than £200 a month more than borrowers are used to paying, based on someone carrying a mortgage balance of £200,000 over 25 years, she said.
Williams added: “However, it is important that these borrowers do not delay exploring their options as the average SVR, or return to rate, has also increased and is currently at 5.40 per cent, the highest it has been in 13 years.”
The average tracker rate over two years is 3.33 percent, Williams added.
While this may be lower than the average two- and five-year fixed rate, it would be worth speaking to a suitably qualified adviser to consider the implications, she added, as further increases in the Bank of England’s base rate are expected.