Homeowners and buyers looking for a mortgage are urged to act quickly as prices rise and product choice decreases.
The number of mortgage product options saw the biggest monthly decline since July 2023, with the number of deals falling from 6,645 in October to 6,402 in November, Moneyfacts said.
Lenders have been cutting deals and adjusting prices upward in recent weeks in response to rising swap rates, which they use to adjust their prices.
According to Moneyfacts, the average two-year fixed rate has actually fallen slightly over the past month, falling from 0.01% to 5.39%. However, the five-year fixed interest rate rose by an average of 0.02% to 5.09%.
Meanwhile, the typical ‘shelf life’ of a mortgage – the time it remains on the market – has fallen from 21 to 17 days, meaning potential borrowers have less time to take advantage of new deals.
These factors together suggest that there is volatility in the mortgage market, and despite it interest rates are lowered by the Bank of England Last week, borrowers are unlikely to see mortgage prices follow this route.
Rachel Springall, financial expert at Moneyfacts, said: “Borrowers will be disappointed to see the product volatility in the mortgage market as choice has plummeted and the shelf life of a deal has fallen to 17 days, compared to 21 days month-on-month .
“These steps make it essential for potential borrowers to act quickly to secure a new deal. There will be many borrowers coming off a cheap rate in the coming months, so it is imperative that they look for a new offer and not default on an expensive fallback rate.
“A longer-term fixed deal may be popular for peace of mind, but borrowers may be left on the fence for longer.
“There are expectations that the Bank of England will further cut its base rate next year, but recent events have created uncertainty about fixed interest rates. Exchange rates have been on the rise since the Budget and lenders will traditionally increase fixed rates in response.”
She added: “Lenders will undoubtedly be watching the markets closely in the coming weeks and any borrowers concerned about the affordability of their mortgage should seek independent advice as soon as possible.
“As we have seen over the past month, mortgage deals are never guaranteed to last very long, and if this situation continues it will pose a challenge for borrowers who are reluctant to exit the market.”