Despite the unrest in the mortgage market subsiding in April, first-time buyers in the market remain under pressure due to limited choice and limited affordability, according to Moneyfacts data.
Data shows that the choice of mortgage products has shrunk by around 10% since the start of March, while higher loan-to-value (LTV) deals (10% or less deposits or equity) have fallen by 14%, a blow to first-time buyers in particular, according to Moneyfacts.
Total product choice increased month-on-month, with 583 options, but this represents less than half of the deals (1,238) lost the month before.
Lenders withdrew products from sale due to uncertainty about the future interest rate path. Mortgage product churn calmed down and the average shelf life of a deal doubled from eight to 16 days.
Since the beginning of April, the average two-year fixed rate has fallen by 0.06%, and the average five-year by 0.07%, to 5.78% and 5.68%, but these rates are higher than at the beginning of March, at 4.84% and 4.96% respectively.
Moneyfacts’ average mortgage interest rate fell for the first time (month-on-month) since January 2026 to 5.66%, but remains higher than at the beginning of March at 4.90%.
The average two- and five-year fixed interest rate with an LTV of 95% remains above 6%.
Fixed rates are still lower than the average ‘revert to’ rate or the standard variable rate (SVR).
The average SVR remains at 7.13%, down 0.45% year-over-year from 7.58%. The highest recorded figure was 8.19% in November and December 2023.
Money facts Financial expert Rachel Springall says: “Borrowers may be feeling some relief from the lull following the absolute mortgage crisis, but first-time buyers in the mortgage market are being hit hardest. Lenders have been slowly unwinding deals and moving to cut back on rate hikes in April.”
“Unfortunately, there is still much more room for improvement as product choice overall is still down around 10% since the start of March as less than half of the lost deals have returned. New buyers will be frustrated to see that the choice of higher LTV options has fallen by 14% since the start of March.”
“The global pressures caused by the conflict in the Middle East have completely reversed the expected path of inflation and future interest rate setting, causing lenders to cut deals and increase fixed rates.”
“Fortunately, the calm of product churn in April, compared to the turmoil in March, has resulted in the average deal life returning to a more realistic time frame, from around a week to just over two weeks.”
“For first-time buyers or those with a small equity of just 5% hoping to secure a two- or five-year fixed contract, average fixed interest rates will remain above 6%. It is vital that first-time buyers in particular feel supported to keep the market moving, but affordability issues are evident. Higher interest rates, the lack of affordable housing and the potential for a spike in the cost of living could all damage the mortgage market.”
“Support and innovation from lenders will be crucial to keep the market moving. The pressure of high payments will make borrowers consider a longer-term deal, for example for 35 or 40 years, to make initial payments more manageable. However, this means paying more interest overall, so it makes sense to overpay where possible to reduce debt and mortgage term.