Average shelf life of a mortgage ‘falls to record low of just eight days’

The average “shelf life” of a mortgage is just over a week – which is around half the length recorded in the aftermath of the mini-budget – according to a financial information website.

At the start of April, mortgages were sitting on the market for just eight days before disappearing, Moneyfacts said.

This is the shortest time recorded since the website’s records started in November 2011.

At the start of October 2022, in the days following the mini-budget, mortgages had a typical shelf life of 15 days.

Mortgage rates have jumped and deals have been withdrawn in recent weeks as the conflict in the Middle East changed expectations for financial markets.

Swap rates, which are used by lenders to price mortgages, increased.

Lenders pulled products from sale amid uncertainty over the future path of interest rates.

Moneyfacts said that at the start of April, it counted 6,201 mortgage products, compared with 7,484 at the start of March.

The pool of 6,201 options is at its lowest count in two years since March 2024, when 6,004 deals were available, the website said.

Rachel Springall, a finance expert at Moneyfacts, said: “The lifespan of a mortgage deal has plummeted to a record low of just eight days on average and mortgage product availability has shrunk by around 17% in just one month.”

She added: “The unrest in the Middle East caused mortgage mayhem, with lenders rushing to pull products from sale and reprice at higher rates throughout March.

“Unfortunately, this has led to a drop of almost 400 options for borrowers with just a 5% or 10% deposit or equity, awful news for first-time buyers.

“The market overall has experienced the worst upheaval to mortgage choice since the mini-budget, yet another blow for borrowers over the past five years, which includes the surge in interest rates during the summer of 2023 amid higher inflation expectations.”

Ms Springall said that, based on average mortgage rates and a loan of £250,000 over 25 years: “If someone took out a typical mortgage now, compared to the start of March, it would cost them around £1,800 a year more in repayments on a two-year fixed deal.

“Worse still, borrowing the same size loan on a typical mortgage now, compared to 2021 on a five-year fixed deal, would cost around £5,000 more in mortgage repayments over one year.”

Borrowers’ individual circumstances will vary.

Ms Springall added: “It will be essential for borrowers to keep calm and seek advice from a broker to navigate the mortgage maze.

“Brokers are an anchor during times of turbulence as they can help borrowers understand how they can best afford a mortgage or plan the available options months in advance.”

She said some borrowers may consider making mortgage overpayments to potentially reduce their costs over the longer term.