The average “shelf-life” of a UK mortgage has nearly halved in a month, new data shows, as lenders raise rates on home loans.
According to financial information website Moneyfacts, at the start of June, the average mortgage spent just 15 days on the market, down from 28 days at the start of May.
The June figure marks the shortest shelf-life recorded since March. The lowest number on Moneyfacts’ records is 12 days in July 2023.
While mortgages are typically spending less time on the market, the number of products to choose from surged over the month to its highest level in more than 16 years.
Moneyfacts recorded 6,629 product choices at the start of June, the highest figure since February 2008 with 6,760 deals.
Rachel Springall, finance expert at Moneyfacts, said: “Lenders spent the first few weeks of May repricing, in reaction to a volatile swap rate market, but the latter end of the month was more subdued, around the time the government announced there would be a general election in July.
“Despite the small uplift in rates, there was another rise in the overall product availability of residential mortgages, standing at its highest point in 16 years.”
Mortgage rates are influenced by SONIA swap rates, which reflect what lenders think will happen to interest rates in the future. The Bank of England is not expected to cut interest rates until August or September, with markets paring their bets since the start of the year.
Moneyfacts added that the overall average two and five-year fixed mortgage rates rose between the start of May and the start of June, to 5.93 per cent and 5.50 per cent respectively. The last time the average two-year rate was six per cent or above was on 7 December.
Springall added: “Consumers concerned about rising rates would be wise to seek advice from an independent broker to see if they can lock into a deal early, as some will let borrowers do this from three to six months in advance.
“However, there may well be some borrowers sitting on the fence, hoping the market gets a base rate cut this year, but they could still grab a lower rate deal than if they were to sit on their SVR (standard variable rate) without fixing, such as with a tracker deal.”