What is the current shelf life of a mortgage deal?
The term 'shelf life' relates to the amount of time between a lender launching a new mortgage deal and withdrawing it from the market. The average shelf life has almost halved from 28 days at the beginning of February this year to 15 days at the beginning of March. This is the lowest it has been for 6 months.
What does this mean for borrowers?
For borrowers looking to secure the best mortgage deal, it can be a frustrating environment as there is an increased time pressure to secure deals before they are pulled. On one hand, it can be tempting to wait for a better rate to come to market while on the other hand, delaying a decision could mean that you miss out.
According to Moneyfacts, interest rates on 2-year and 5-year fixed rate mortgage deals have steadily increased since earlier this year with the average 2-year fixed rate deal rising from 5.56% to 5.76% and from 5.18% to 5.34% on 5-year deals.
Although mortgage rates had fallen between June 2023 and January 2024, we have, since seen rates steadily increase. Lenders seem to be responding to increased swap rates and the announcement of a technical recession ahead of another Bank of England base rate review on the 21st of March.
Total number of mortgage deals on the rise
While mortgage deals may be disappearing faster than borrowers might like, the number of deals to choose from is at its highest since March 2008. The overall number of deals offered by lenders has increased by over 30% since the this time last year with 90% loan-to-value mortgage deals seeing the largest increase. So, with more mortgage deals to choose from and an increased number of deals for buyers with smaller deposits, there is at least some good news for homebuyers and those looking to remortgage.
How to secure a mortgage deal before it is pulled
If you are remortgaging ahead of the end of your current mortgage deal term then you can lock in a new mortgage deal up to 6 months before your existing deal ends. Lenders may allow you to switch to a better rate if one transpires before you switch your mortgage deal over. This can make it a little easier to lock in a deal but you should speak to your lender to check that it allows this and stay in touch until your deal is switched over. You can read more about how to do this in our article, "How to remortgage and get the best rate".
Securing a mortgage if you are moving to a new home or buying your first will be slightly different. Not all lenders will lock in your mortgage rate at the same stage. Some lenders will honour rates as long as you have an agreement in principle, others will require submission of a full mortgage application and a few lenders withhold the right to change the interest rate on your mortgage right up until you complete your property purchase. It is best to enquire upfront so that you are aware of the actions needed to secure your mortgage deal.
Staying on top of the latest mortgage deals can be tiresome but it can be made easier if you choose to use a mortgage broker, as they do the hard work for you.
Some mortgage brokers charge a fee for their services, however, many will provide their services for free because they are paid by the lender directly. A mortgage broker can provide some initial mortgage advice to help find the best mortgage deal, as well as provide extra help to process and progress your mortgage application. Another reason to use a mortgage broker is that lenders will often reach out and inform them ahead of pulling a mortgage deal, giving them more time to act on behalf of their clients. Also, some mortgage deals are only made available through a mortgage broker so you could end up accessing a wider range of mortgage deals this way.
You can find a mortgage broker near you by using the professional search website, VouchedFor* where you will find mortgage brokers listed according to location, expertise and customer experience. Alternatively, you can access mortgage advice through Habito*, an online mortgage broker where the advisers search the market without charging a fee. Habito searches over 90 lenders' direct and broker-only mortgage deals giving you access to a much wider range of mortgage offers.
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
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