House hunters and other borrowers across borrowers have close to 1,000 fewer mortgage deals to choose from than they did a year ago, as more than 500 deals have simply vanished since last month.
The number of available fixed and variable rate home loans has shrunk to 3,890 – marking the lowest level since April 2021, Moneyfacts.co.uk said today.
Some 517 fewer residential mortgages were available in September than the total counted by Moneyfacts just a month earlier, in August.
Back in September last year, 4,812 mortgage deals were available – 922 more deals than there are this month.
There are also now 1,425 fewer mortgages than there were at the start of December 2021, before the recent run of Bank of England base rate rises.
Moneyfacts said the fall in the choice of available mortgage products has been happening across the range of deposit sizes.
Despite the selection of mortgage deals narrowing, it could still be worth borrowers seeing if they could get a cheaper deal, with the average standard variable rate (SVR) now at its highest in well over a decade.
People end up on their lender’s SVR when their initial mortgage deal comes to an end.
The average SVR now stands at 5.40 per cent – the highest rate since December 2008.
Looking at how rates are rising generally, Moneyfacts said the average two-year fixed-rate mortgage across all deposit sizes is 4.24 per cent, the highest rate since January 2013.
The average five-year fixed-rate, at 4.33 per cent, is the highest since November 2012.
More positively for borrowers, the average “shelf life” of a mortgage is increasing.
The average mortgage deal remains on the market for 28 days typically, up from an all-time low for Moneyfacts’ records of 17 days in August.
However, Moneyfacts said that when the significant number of products that have been withdrawn is also taken into consideration, it may simply be a sign that lenders are tightening and condensing their ranges.
Eleanor Williams, a finance expert at Moneyfacts, said rising mortgage rates “may well be disappointing for many, particularly those with a now maturing two-year fixed-rate deal who may be feeling rather concerned that, at 4.24 per cent, the overall average rate is now 2.00 percentage points higher than when they secured their deal (in September 2020 the average rate was 2.24 per cent).”
This average rise may equate to more than £200 more per month than borrowers had been used to paying, based on someone having a mortgage balance of £200,000 over a 25-year term, she said.
Williams added: “However, it’s important these borrowers are not put off exploring their options, as the average SVR or revert to rate has also risen, currently sitting at a 5.40 per cent – the highest we have recorded in over 13 years.”
The average two-year tracker rate stands at 3.33 per cent, Williams added.
While this may be lower than average two and five-year fixed-rates, it could be worth speaking to a suitably qualified adviser to consider the implications, she added, as further rises in the Bank of England base rate are expected.