The forthcoming Moneyfacts UK Mortgage Trends Treasury Report can reveal that the number of residential mortgage products on the market has increased by 244 month-on-month. As a result, there are now more than 5,000 such products available, the first time this has occurred since March 2008.
|Number of residential mortgage products||6,192||4,604||4,791||5,035|
Not only that, but Charlotte Nelson, finance expert at Moneyfacts, has reported that this is "the largest monthly increase since November 2014." That said, the number of deals is still well below March 2008's number of 6,192, but then the market has also changed quite a lot in the meantime.
As Charlotte said, "data from the Moneyfacts UK Mortgage Trends Treasury Report showed that back in 2008 just over half (54%) of the products on the market were fixed rate, compared to a whopping 82% this month." Considering the low mortgage rates witnessed over the last year, it's not surprising that so many people would flock to a fixed rate deal, which allows them to secure these low repayments for the length of their initial mortgage term.
"Unusually, the extra products on the market seem to have had little to no effect on average rates, with the average two-year fixed rate remaining unchanged at 2.52% this month," Charlotte added. "This suggests providers are currently trying to compete for mortgage business in other ways … opting to perhaps offer fee-free deals and products with incentive packages, which have in turn boosted product numbers."
Indeed, while the Bank of England did not raise base rate back in May, there's still every possibility that they will increase it sometime this year, and providers don't want to be caught out offering unsustainably low rates when/if that happens. That's why many are opting for a wait and see approach when it comes to their rates.
This does not mean borrowers should wait and see what happens, however. If or when base rate finally increases again, mortgage rates will almost certainly rise with it, which means higher repayments for all those who waited too long to remortgage to a better deal.
And it's not just those who currently have a mortgage that can benefit from the record number of deals. Charlotte pointed out that mortgages at 90% loan-to-value (LTV) have hit a particular milestone, "with fixed product numbers reaching 624, the highest on Moneyfacts' records." She then went on to explain that this is largely due to lower LTVs becoming increasingly saturated, making it hard for providers to compete in these areas.
"With all these extra options available, borrowers now have a lot more choice, however it can be difficult to navigate to see which is the best deal," Charlotte concluded. "Anyone confused as to what is the best option would be wise to seek advice before taking the plunge."
Alternatively, you could have a look at our mortgage Best Buy charts to see if you can find the right deal for you, whether you are remortgaging, looking to move home or taking that first step onto the property ladder.
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.