By early March, lenders were typically withdrawing mortgage deals after only 14 days, marking the most rapid turnover since August 2023, when the average shelf life stood at 13 days. Even in the turbulent aftermath of the 2022 mini-budget under then-Prime Minister Liz Truss, the average mortgage shelf life was slightly longer at 15 days. Mortgages have not disappeared in recent weeks as fast as they did in the aftermath of the mini-budget, with at least 530 homeowner mortgage deals vanishing from the market since March 9, representing about 7.5 per cent of deals, compared to the biggest single-day fall of 935 products on September 27, 2022, equating to a little more than 25 per cent of deals available at the time.
In recent days, lenders have been scrambling to increase mortgage rates and withdraw some products amid changing expectations in financial markets following the conflict in the Middle East. Swap rates, which are used by lenders to price mortgages, have been increasing, and the cost of home loans has shot up since the outbreak of war dashed hopes of interest rate cuts and sparked fears of resurgent inflation. The Bank of England is due to announce its next base rate decision on Thursday, with many economists expecting the rate to remain unchanged at 3.75 per cent, rowing back from previous expectations of a cut.
Borrowers have been handed some respite after a fall in the cost of fixed-rate mortgages following weeks of increases. The average two-year fixed-rate mortgage fell yesterday, albeit marginally, to 5.89 per cent from 5.9 per cent while the typical five-year rate dipped from 5.78 per cent to 5.77 per cent. It was the first time average rates for both have fallen in tandem since early last month. However, experts said it was too soon to say whether this is the turning point, and noted the rates are still far higher than before the war when the average two-year and five-year fixes were 4.83 per cent and 4.95 per cent respectively.