Choice of mortgage deals rises for 15th month in a row
If you’re looking for a new mortgage, you now have a wider choice of products. New data has revealed that the number of mortgage deals available has risen for the 15th consecutive month, with fixed-rate products driving the increase in choice.
The number of deals available to borrowers with a small deposit has also increased in recent months.
61% more mortgage deals than five years ago
The latest data from financial analysts Moneyfacts has revealed that the choice of mortgage products in the UK has risen for the 15th consecutive month.
There are now 4,657 deals available, 53 more than in July and 843 higher than the same month in 2016 when there were just 3,814 products to choose from.
Moneyfacts report that the residential mortgage market has grown substantially since product numbers hit an all-time low of 1,209 in April 2009. Even compared to five years ago, when the number of products stood at 2,888, there has been an increase of 61%.
Much of the recent increase can be attributed to lenders launching ranges of three-year fixed-rate deals.
Charlotte Nelson, finance expert at Moneyfacts, explains: "With the two-year fixed-rate sector still seeing heavy competition, providers are starting to look elsewhere, and the three-year fixed-rate market offers providers an opportunity that some have used to branch out."
Indeed, the number of deals available in the three-year fixed market has increased by almost 10% in the last month, to 439. “The talk of an impending base rate rise means that borrowers are starting to look at their options to protect themselves from a potential rise in monthly repayments," according to Charlotte.
If you’re considering a three-year deal you should bear in mind that it is likely to be more expensive than a two-year product. At present, the average three-year fixed-rate stands at 2.54%, 0.31% higher than the average two-year fixed-rate deal.
Choice of first-time buyer deals hits a record high
The latest figures also paint a good picture for first-time buyers and those looking to buy with a small deposit.
The number of high loan-to-value (LTV) mortgages available hit a record high in August as lenders overcame the end of the Help to Buy guarantee scheme. There were 16 additional deals at 95% loan-to-value added in the last month, pushing the total number to 276. This is the highest figure since the global financial crisis, almost a decade ago.
For borrowers with a 10% deposit, the choice of deals increased by 17 to 649, the highest level since February.
Moneyfacts says: “It’s particularly interesting to note that availability at 95% LTV is now higher than it was in December last year, just before the government’s Help to Buy mortgage guarantee scheme was withdrawn.
“Since then, availability had started to falter as providers adjusted to the market, but it appears that they’ve done so now – they’re getting comfortable lending at higher LTVs without government support, and are boosting their product range accordingly.”