Mortgage rate increases in July reversed the reductions seen in the previous month, according to analysis of average rates on the market. The average new mortgage rate at the start of August was 5.59%, which is 0.12 percentage points higher than at the start of July, according to Moneyfacts. This brought the average rate back to its level at the start of June, which was also 5.59%.
Market dynamics and product shelf life
Moneyfacts calculates the average new mortgage rate from on-sale, "core" market fixed and variable tracker mortgages, excluding deals such as adverse credit, shared ownership only, and standard variable rate (SVR) mortgages. By the start of August, the average shelf life of a mortgage on the market was just 11 days, down from 14 days at the start of July. This is the lowest typical time period since April, when the average length of time a mortgage deal was on the market before being withdrawn was eight days, according to the financial information website, which analyzed the market at the start of each month for the research.
Product availability remains strong
Despite the faster turnover of mortgage products, overall availability remains strong. Moneyfacts counted 7,357 products available at the start of August, up from 7,177 at the start of July. Rachel Springall, a finance expert at Moneyfacts, attributed the volatility to concerns over the future outlook of interest rates amid the conflict in the Middle East, which have led to fluctuations in swap rates used by lenders to price mortgages.
Springall said: "Due to the swift action of lenders to re-price their ranges last month, the average shelf life of a mortgage dropped to 11 days, now its lowest recorded since April, when mortgage turmoil pushed the lifespan of a mortgage down to just eight days." She added: "In positive news, mortgage product availability rose for a fourth consecutive month."
