News that a number of lenders are offering sub 4% mortgages has been further boosted by the fact there are now more deals to be found in the market. For borrowers, this will be some relief as the mortgage market regains confidence even as the Bank of England base rate continues to rise.
Increased mortgage choice
February 2023 has seen a large increase in the number of mortgage deals on offer in the UK and borrowers can now expect to choose from hundreds more mortgages compared with January 2023. It is a welcome indication that stability is returning to the mortgage market.
Borrowers with a 40% deposit or equity in their homes are able to choose from the widest range of mortgage deals in 3 years and almost 400 more 60% LTV mortgage deals have appeared over the last month. Additionally, those with smaller deposits of 5-10% find their choices improve with more deals entering the market aimed at 90% LTV and 95% LTV mortgages.
Are mortgage interest rates falling?
We recently reported that mortgage rates are falling with a number of lenders offering sub 4% fixed rate mortgages. Average mortgage rates for 95% loan-to-value offerings have fallen below 6% for the first time in four months and we are seeing rates steadily reduce on a number of 2 and 5-year fixed rate deals as we see more competition amongst lenders.
Analysts believe that the Bank of England base rate is likely to increase fractionally again this year with many saying it may then start to fall towards the end of the year. Check out our Mortgage Rate Comparison Tool to find the most up-to-date deals based on your specific mortgage requirements.
Further signs of stability in the mortgage market
Many lenders withdrew mortgage deals from the market in the aftermath of the mini-budget in September 2022. Since then, we have seen mortgage rates fluctuate daily and even hourly but we are now starting to see some stability. Deals over the last month have remained valid for 28 days, up from just 15 days, providing more confidence for borrowers who may worry about deals disappearing overnight.
Is it now time to fix your mortgage rate?
Borrowers who are on their lender's Standard Variable Rate (SVR) may wish to review their positions as SVRs have been steadily increasing and exceeding many fixed rates. The average SVR is currently 6.84%, the highest since October 2008 when the average SVR was 7.01%. Fixing your mortgage interest rate while rates are falling is likely to leave borrowers wondering whether they should fix now or wait. However, as the cost of living continues to increase, a reduced rate and fixed monthly mortgage payment will be attractive to many who seek stability and predictability for their household budgets. You will find a thorough exploration of this in our article, "Remortgaging in 2023 – is now the right time to fix & for how long?".
It is a good time to speak with your mortgage broker to discuss the pros and cons of locking in a mortgage deal whether you are buying or simply remortgaging your existing mortgage deal. If you do not have a mortgage broker you may want to consider Habito*, an online mortgage broker that has access to the whole mortgage market. You can also search for mortgage brokers in your local area using VouchedFor, a service that will put you in touch with a vetted mortgage professional in your area.
If a link has an * beside it this means that it is an affiliated link. If you go via the link, Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. The following link can be used if you do not wish to help Money to the Masses or take advantage of any exclusive offers - Habito, VouchedFor
