The total choice of mortgages fell month-on-month, as shelf-life rose, the Moneyfacts UK Mortgage Trends Treasury Report knowledge reveals.
Product choice fell to six,842 choices, nonetheless, choice is up year-on-year (6,657 – August 2024).
The common shelf-life of a mortgage product rose to 17 days, from 16 days a month in the past; a 12 months in the past it was 17 days, and two years in the past, it was simply 13 days.
Average mortgage charges on the general two- and five-year fastened charges fell by 0.08% and 0.07% to five.01% and 5.01%, respectively, barely greater margins than the prior month.
You have to return to September 2022 and May 2023 when two- and five-year fastened charges have been decrease (4.24%) and (4.97%) respectively. These have been the final occasions the charges have been at sub-5%.
At the beginning of August 2024, the typical five-year fastened price was 5.38%; at the beginning of August 2025, the speed was 0.37% decrease at 5.01%. However, the typical two-year fastened price has fallen by 0.76% over the identical interval, down from 5.77% to five.01%.
The Moneyfacts Average Mortgage Rate fell to five.04%, down from 5.11% month-on-month. It is down from 5.65% since August 2024, and decrease than 6.52% in August 2023.
The common two-year tracker variable mortgage price remained unchanged at 4.91%.
The common ‘revert to’ price or Standard Variable Rate (SVR) remained at 7.42%. In comparability, the very best recorded was 8.19% throughout November and December 2023.
Commenting on the newest knowledge Moneyfacts finance professional Rachel Springall stated that lenders had blended attitudes to pricing in the course of the month, and the churn of merchandise resulted in a dip in choice, cancelling out the earlier month’s rise. “In spite of the maybe cautious method, price cuts prevailed to push the Moneyfacts Average Mortgage Rate down to five.04% at the beginning of this month, edging ever so nearer to dipping under 5%.”
Base price strikes
“As it stands, lenders might nicely think about a extra low and gradual method to creating cuts over the subsequent few weeks, due to the knife-edge base price determination final week which led to an increase in swap charges.
“Piling onto this, the markets might react badly to any important choices made within the Autumn Budget, an occasion which could be a blessing or a curse for future price setting. If inflation will get uncontrolled or financial uncertainties spike, debtors can overlook about extra base price cuts by the Bank of England this 12 months.”
Springall identified that it has now been two years for the reason that common two-year fastened mortgage price hit a 15-year excessive, as lenders frantically repriced their offers the typical shelf-life of a mortgage was simply 13 days.
“Lenders are nonetheless churning their ranges at the moment, albeit with a shelf-life of 17 days, but such repricing is to the good thing about debtors. The incentive to refinance at the moment onto a hard and fast deal is rather more crucial, as there’s now a big distinction of greater than 2% to flee a revert price, in comparison with simply 1% again in August 2023, based mostly on the typical two-year fastened price versus the typical Standard Variable Rate (SVR).”
Springall added that the massive distinction to first-time patrons and people borrowing at greater LTVs because the 12 months progresses would be the modifications to the loan-to-income (LTI) guidelines.
