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Borrowers encouraged to act fast as mortgage rates rise

MORTGAGES | 13.11.2020

Increasing interest rates are becoming more and more prevalent on many new home loans, as the market struggles to cope with surging demand for borrowers. It seems certain lenders are putting up rates in an effort to deter some potential borrowers, as coronavirus continues to limit their capacity to process applications. 

Borrowers are being encouraged to act quickly due to the average rates on 2 and 5 year fixed mortgage deals rising for the fourth consecutive month. This has resulted in the average 2 year rate for borrowers with a 15% deposit now being over 3%.

Shelf life for mortgage products is dropping

The average two year rate at an 85% loan-to-value (LTV) ratio now stands at 3.12%, according to the latest data due to be released in the Moneyfacts UK Mortgage Trends Treasury Report. This alone is an increase since July, where it stood at 2.11%. Data from Moneyfacts UK has found that average rates across all LTVs have actually increased over the last 3 months. As well as this though, the average shelf life for a mortgage product has also dropped to the lowest since August 2018, to around 28 days. Meaning many borrowers are in a position where they need to act quickly to secure the best deals This is all demonstrating just how much the mortgage market remains in flux at the moment. Borrowers are being challenged with having increasingly limited time spans to secure the mortgage products of their choice.

More choice in mortgage deals

However, data from Moneyfacts UK has also shown that borrowers seemingly have more choice when it comes to mortgage deals this month, when compared to October. With the number of products rising by 145 across all LTVs between October and November. First-time buyers are continuing to face challenges during this time, as there was no change in the number of deals available at 100% and 95% LTVs. This could indicate that a number of lenders are still focusing their offerings on traditionally lower-risk borrowers. If you’re looking to borrow though, it’s worth noting that the lowest rate may not be the best option for you. As you should consider other factors of the deal, such as product fees and incentives. With rates rising, you may want to act faster if you wanted to secure 2 or 5 year fixed deals at the lowest mortgage rates. Keep in mind that it’s always good to get professional advice on the best steps to take.

Looking for a mortgage deal? We can help

Perhaps you’re approaching the end of your current deal, or you’re looking for your first mortgage, whatever you need mortgage-wise, TaylorMade has the knowledge and experience to help you.  Choosing to remortgage can help to cut the cost of what is probably your biggest expense during this critical time. And as leading mortgage brokers in Manchester, we can provide you with a personalised remortgage solution, designed specifically to fit your needs and circumstances. If you’re simply looking for the best mortgage deal to fit your needs, speak to our dedicated and experienced team now, who can search the whole market for you. If you’re currently looking for a mortgage, we also have an online mortgage calculator which can give you a rough idea of how much you could borrow and what your monthly repayments might be. Get in touch with us today on 0345 305 2540, or info@taylormade-finance.co.uk.
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