uk house prices mortgage

Mortgage rates fall but products are only available for limited time

Mortgage rates have fallen as competition between lenders heats up, but borrowers are urged to act quick as mortgage deals are lasting an average of just three weeks.

Mortgage borrowers will likely further welcome the news that their choice in mortgage deals has increased. The number of available mortgages is nearly back to pre-pandemic levels. Between July and August 2021, the number of mortgage products increased by 148, from 4,512 to 4,660, according to data from Moneyfacts.

At the same time, mortgages rates are falling, which is providing competitive deals for homebuyers and investors. However, borrowers looking to lock in the best mortgage deals will need to act quickly as products are not being offered for long.

Competitive interest rates

There has been a rate war in the UK mortgage market as competition between lenders heats up. Lenders are offering loans with ever-cheaper interest rates. The average two-year fixed rate deals fell from 2.55% to 2.52% between July and August. Additionally, the average five-year fixed rate fell from 2.78% to 2.75%.

Throughout the past couple of months, lenders cut rates for mortgage deals with lower loan-to-value (LTV) ratios in particular. But recently, mortgage rates have fallen for deals on the other end of the market. The largest cut was seen by borrowers with a 5% deposit.

For 95% LTV mortgages, the average rate on a two-year fixed deal has decreased by 0.10% month-on-month. The rates fell from 3.79% in July to 3.69% in August. For five-year fixed deals, the average rate decreased by 0.08%, falling from 4.01% to 3.93%.

However, borrows should keep in mind that choosing a slightly higher rate with a lower fee can sometimes be cheaper. This is particularly the case for buyers with smaller mortgages. A mortgage broker can help you assess different mortgage deals to help you decide the best one for your situation.

Eleanor Williams, finance expert at, says: “This reflects that, likely supported by the introduction of the Mortgage Guarantee Scheme, providers are prepared to cater to this traditionally higher-risk demographic, although their desire to do so remains some way behind where this was compared to a pre-pandemic August 2019 as there are currently 199 and 116 less deals to choose from than there were two years ago.”

Shelf life of mortgage deals

The average mortgage product is currently available for only 21 days. In the last month alone, the shelf life of the average deal has fallen by nine days. This is giving borrowers only three weeks to secure a mortgage deal.

“This month has seen the average shelf life for a mortgage product reduce by nine days to just 21 days, last seen in May 2017 and the joint lowest we have recorded,” Eleanor Williams comments.

“Borrowers considering their mortgage options may therefore find that products have a limited period when they are available, and so having the up-to-date market knowledge of a qualified adviser could be invaluable in ensuring they can secure their chosen product in time.”

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