Shelf life of mortgage products almost halves

Category: Mortgages
Date: 7/17/2009

The average shelf life of mortgage products fell significantly in June, falling from 23 days to just 14 days, the latest Moneyfacts Treasury Report has found.

The monthly figures, which report on mortgage products and trends in the UK, suggest that the volatile and turbulent conditions in the sector is having an effect on the time that home loan deals stay on the market.

Escalating fixed mortgage rates, combined with lenders withdrawing and replacing products as they become too marketable, have been key to the substantial fall in the shelf life of mortgages.

The practice of lenders consistently changing the rates of their home loans has certainly shortened the life span of mortgages, as the actual number of products grew by just 33 to 1,299 in the month. There are currently 1,305 products on the market.

"It is bad news for consumers that mortgage deals are only appearing in the window for such a short period," Darren Cook, analyst at Moneyfacts, commented. "There are only a limited number of cheaper deals available and before the consumer has a chance to look at them a second time, they are gone."

"LIBOR and SWAP rates are continuing to prove unpredictable and I would not be surprised if the shelf life is cut even further during the next few months.

"When the Bank of England cut interest rates by a total of two and a half per cent within two months back in November and December last year, the shelf life fell to only six days, which is less than the life of a pint of milk."