Author: interestratesinfo

The average shelf life of a mortgage has nearly halved in the space of a month, according to a financial information website.

At the start of June, the typical mortgage was spending 15 days on the market before being pulled from sale, declining sharply from an average of 28 days at the start of May, Moneyfacts found.

June’s figure is the shortest average time period recorded by the website since March. The lowest shelf-life average on Moneyfacts’ records was 12 days, recorded in July 2023.

The data was sourced from the first available day of each month.

While mortgages are typically spending less time on offer, the number of products to choose from has jumped to the highest level in more than 16 years.

Moneyfacts counted 6,629 options at the start of the month, the highest level since 6,760 deals were recorded in February 2008.

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Can a lender end your fixed-rate deal early? This was the crux of a question asked by Money blog reader Michelle from Kent…

“I bought my first flat in April 2023 with a two-year fixed-rate mortgage. I got the deal with the help of a broker, who has now contacted me saying my deal is due to end in November – significantly earlier than I had expected. I’ve spoken to my lender – they said the deal I was on no longer exists. Is there anything I can do to keep my current rate?”

We asked David Hollingworth, associate director at L&C Mortgages, to answer this one…

“Fixed mortgage rates do what they say on the tin and lock in the interest rate payable for a specified period of time. Those periods will generally be blocked into market sectors and so are usually tagged as two, three or five-year fixed rates.

“Once that deal is taken, the terms cannot be changed by the lender and the rate can’t be brought to an end early.

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Around 100,000 homeowners will be faced with higher mortgage payments between now and the 4 July election, the Liberal Democrats have found.

Research commissioned by the political party, based on data from the Financial Conduct Authority (FCA), suggested this would amount to more than 3,300 households per day seeing a rise in their monthly mortgage payments. 

It found homeowners would be subjected to an average increase of £240 per month. 

The Lib Dems said Rishi Sunak’s claim that his economic plan was working after inflation fell to 2.3%, nearing the Bank of England’s 2% target, showed he was living in a “parallel universe” as families were dealing with higher mortgage payments. 

It said the Prime Minister would be facing a “blue wall reckoning”, with its data suggesting people in its stronghold constituencies Taunton Deane, Tewkesbury and North East Cambridgeshire were the worst impacted by higher household costs. 

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Around one in five new first-time buyers took out mortgage terms stretching beyond 35 years in the first quarter of this year, according to a trade association.

Some 21% of people taking their first step on the property ladder had home loans lasting for more than 35 years, UK Finance said.

The trend of longer-term mortgages is “further evidence of the ongoing affordability crunch”, as costs and house prices remain high relative to incomes, UK Finance said.

Its review added: “Although the proportion of borrowing at up to 40-year terms eased slightly in (quarter one), it remains far higher than we have seen in the past.

“This is the case for all types of borrower, but most significantly amongst first-time buyers.”

UK Finance said most first-time buyers typically do not keep their mortgage over the full term because they move house or remortgage.

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