The average shelf-life of a mortgage has dropped from 28 days last month to 15 days, according to a new report released by Moneyfacts.
Rate rises on two and five-year fixed rate deals increased by a modest 0.02%, marking the smallest monthly rise in 2024. Rates also remain slightly lower in comparison to December 2023.
Between the start of May and the start of June 2024, average two and five-year fixed rates rose to 5.93% and 5.50%, respectively. The average two-year fixed rate remains 0.43% higher than the five-year equivalent – which is the largest gap since October 2023 (0.50%).
The average standard variable rate remains at 8.18%, just short of the record high of 8.19% recorded during November and December 2023. Meanwhile, the average two-year tracker variable fell to 5.94%.
Product choice overall rose month-on-month, to 6,629 options, its highest level since February 2008 (6,760).
Moneyfacts finance expert Rachel Springall said: “Borrowers may feel disheartened to see another consecutive month of rises to the average two- and five-year fixed mortgage rates. However, both rose by a modest 0.02%, the smallest month-on-month rise this year. The incentive to fix for longer remains, with the average five-year fixed rate standing 0.43% lower than its two-year counterpart, and the incentive to remortgage is prevalent, as the average Standard Variable Rate (SVR) stands at 8.18%.”
Springall pointed out that lenders spent the first few weeks of May repricing, in reaction to a volatile swap rate market, but the latter end of the month was more subdued, around the time the Government announced there would be a General Election in July.
She added: “Despite the small uplift in rates, there was another rise in the overall product availability of residential mortgages, standing at its highest point in 16 years.
Year-on-year the overall availability of mortgages has risen by 1,662 deals, and within that pool of products, there are 156 more at 90% loan-to-value (LTV) and 124 more at 95% LTV. These rises are good news for borrowers who may be struggling to build a big enough deposit to secure a new deal.”
