Mortgage rate expiration date is reduced to 21 days as lenders compete on price



Mortgage rate expiration date drops to 21 days as lenders compete on price

The average mortgage rate availability has dropped to 21 days, the shortest term since 2017, giving borrowers limited time to apply for a deal.

According to Moneyfacts, the average mortgage retention period is gradually decreasing from 48 days in August 2019 to 29 days in August 2020.

Moneyfacts financial expert Eleanor Williams said this was due to a rate review between lenders as they competed with each other to bring in new business.

“Borrowers considering mortgage options may find that the products have a limited period of time when they are available, so having the current market knowledge of a qualified consultant can be invaluable to ensure they can get their chosen product on time,” she said.

The total number of available mortgage products increased for the tenth straight month to 4,660 in August, up 84% over the same period last year and the highest since March 2020.

The data analytics company said availability has recovered to about 93 percent from levels seen in August 2019.

Affordability at the lower and middle loan-to-value (LTV) levels recovered, with product selection in the 80 percent and 85 percent LTV ranges increasing by 152 and 22 products, respectively, since August 2019.

Product selection for 90 and 95 percent LTV also increased by 25 and 22 products, respectively, from last month.

Williams added that lenders’ appetite is returning, which is partly due to the mortgage guarantee scheme. However, product selection was still lower than before the pandemic, as there were 199 fewer deals in the 90 percent LTV range and 116 fewer deals in the 95 percent LTV range than in August 2019.

Average rates for two- and five-year fixed rates fell for the second consecutive month to 2.52% and 2.75%, respectively.

This is the lowest level for a two-year flat rate since January this year and the lowest average for a five-year flat rate since March.

Williams said: “This drop may be due not only to the growing number of lenders doing deals at less than one percent, mostly at lower LTV levels, but we are also seeing rate revaluation in higher LTV credit groups, especially at 90. percentage LTV, where the two-year fixed average fell 0.14% and the five-year average fell 0.13% this month alone.

The average rate for the two-year fixed rate at 95% LTV also fell 0.1% month-on-month to 3.69%, while the five-year fixed rate dropped 0.08% to 3.93%.


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