Good news for market as mortgage choice hits 12-month high

There’s now more choice in the mortgage market than at any time since last March, before the pandemic reached a peak.

The independent market monitor Moneyfacts says overall mortgage availability rose in January this year for the fourth consecutive month, to 3,215 products – the highest since March 2020.

And since October the total product choice has increased by 42 per cent – that’s the largest four-monthly rise Moneyfacts has recorded since 2007. 

The good news for those agents with buyers needing low-deposit loans, is that with 88 more deals on offer compared to last month, the 90 per cent Loan To Value category saw the largest monthly rise in availability of any category. At 248 products now available, this represents a huge 386 per cent growth in availability since October 2020.

“Further positivity for potential borrowers, regardless of the level of equity or deposit they have, may come from the fact that this improvement in choice has been recorded across the LTV tiers with the exception of 95 per cent LTV, where the five remaining deals are specialist products” explains Moneyfacts’ spokeswoman Eleanor Williams. 

“Those with 10 per cent deposit or equity might be especially pleased to note that this tier has, for a second month, seen the largest uplift in availability. With products at this level often favoured by first-time buyers and traditionally being seen as higher risk for providers, willingness to extend lending in this risk bracket could be an indication that lenders have confidence in the sector, despite ongoing, wider economic uncertainty” Williams continues.  

“After three months at a record low of 28 days, the shelf life for mortgage products has risen to 40 days, giving would-be borrowers a much better chance of securing their chosen deal before it is withdrawn” she adds.

“This, coupled with overall average rates remaining quite static and availability continuing to improve, could imply the mortgage market is now the most stable it has been since the onset of the pandemic last year.”

In detail, Moneyfacts says that the average two-year fixed rate for all LTVs rose for the seventh consecutive month, and the five-year equivalent rose for the second month running.

However, the rises were only 0.01 and 0.02 per cent respectively, and over the last two months, each of these averages has risen by just 0.04 per cent. 

Moneyfacts says: “Considering that between September and October 2020 these rates increased by 0.14 and 0.13 per cent individually, this may indicate a levelling off and potential stability returning to the market.”