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Choice of mortgage products recovers to levels not seen since August

Choice of mortgage products recovers to levels not seen since August

That’s according to moneyfacts.co.uk

The number of mortgage products available has surpassed 4,000 for the first time since last August, according to a financial information website.

Moneyfacts.co.uk, which counts the number of mortgage products at the start of each month, said 4,341 deals were available on February 1.

This compared with 3,643 products counted at the start of January.

Many mortgage deals vanished from the market last autumn, amid market turmoil in the days following the mini-budget.

There were 2,258 deals left by October 1 2022, down from 3,890 at the start of September 2022, according to Moneyfacts’ figures.

In further signs of more stability returning to the mortgage market, the average “shelf life” of a mortgage product before it is withdrawn has increased to 28 days, up from 15 days in January.

The choice of deals for borrowers with smaller deposits has also increased, with 149 products available in February for people with a 5% deposit, edging up from 132 in January.

Some 539 deals were available at the start of February for people with a 10% deposit, jumping from 435 in January.

Product choice for people with a 40% deposit is at its widest in three years, with 606 deals available – the highest number in this loan-to-value bracket since February 2020.

Across all deposit sizes, the average two-year fixed-rate mortgage in early February was 5.44%, up from 5.79% in January.

The average five-year fixed-rate mortgage this month was 5.20%, down from 5.63% in January.

Standard variable rates (SVRs), which borrowers move on to when their initial mortgage deal ends, are continuing to climb.

At 6.84%, the average SVR is the highest on Moneyfacts’ records since October 2008.

Rises in the Bank of England base rate have, in general, been pushing up borrowing costs.

Rachel Springall, a finance expert at Moneyfacts, said: “The mortgage market has shown notable stability with product choice, as the total number of mortgage options has breached 4,000 for the first time since August 2022.”

She added: “Borrowers with a limited deposit may be pleased to see choice expand month-on-month and that both the two and five-year average fixed rates at 95% loan-to-value sit below 6% for the first time since October 2022.”

Ms Springall continued: “Those borrowers sitting on their revert rate may wish to note the average SVR stands at its highest point since October 2008, so switching to a fixed deal may help them reduce their monthly mortgage repayments and give them peace of mind.”

She said: “It is imperative borrowers take time to seek advice to ensure they are considering all the options available, particularly as fixed interest rates are expected to fall further in the coming months.”

Published: by Radio NewsHub

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