Mortgage competition slows at the start of 2018 |
MONEYFACTS ARCHIVE. This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.


Lieke Braadbaart

Online Writer
Published: 08/01/2018

The latest Moneyfacts data can reveal that mortgage competition continues to slow down in January, as the Bank of England's increase to base rate continues to affect mortgages rates and availability. As a result, the average two-year fixed rate now stands at 2.35%, up from 2.20% in October 2017 and unchanged from December.

Rates static

The forthcoming Moneyfacts UK Mortgage Trends Treasury Report reveals that both the average two-year fixed rate and two-year tracker rate have remained static for the first time on Moneyfacts' records. This may be partly due to the seasonal slowdown which can be expected in winter, with not many people willing to take on a mortgage or move house in December.

However, the lingering effects of November's base rate rise cannot be discounted. The graph below shows the significant increase in the average two-year rate that occurred following the base rate announcement. While there's been a welcome slowdown in rate rises since then, providers aren't exactly eager to put rates down again, especially as there may be more base rate rises ahead.

Average 2 year fixed rate mortgage availability

Charlotte Nelson, finance expert at Moneyfacts, suggests that "Providers may be choosing to wait for the dust to settle from the rate rise in November, to see how the land lies." This could mean static rates for some time to come, but that's not all that borrowers should be worried about.

Availability down

Charlotte reports that there's been "a steady decline in product numbers since October 2017, when availability reached 4,815 – the highest number of deals since March 2008 … the effects of the base rate rise, which had been seen as a sure thing, have caused the number of deals to fall by 307 products in just three months."

As a result, the number of mortgages currently available sits at 4,508. Additionally, "The reduction in availability has been most keenly felt at the higher loan-to-values (LTVs), with 74 products being withdrawn from the 90% and 95% LTV markets since November, not to mention four providers exiting the 95% LTV sector in just two months," says Charlotte. "This suggests that lenders are simply unsure of how to price these products after the base rate rise."

"However, borrowers should not despair as rates are still historically low and a good deal can still be had." So, if you're looking to move house or are sitting on your lender's standard variable rate (SVR), why not have a look at our mortgage Best Buys to see if there's a better mortgage product out there for you.


Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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