Choice of mortgage deals tops 5,000 but some rates have climbed higher

The average standard variable rate is at its highest since February 2008, Moneyfacts said.

The total number of mortgages on the market has topped 5,000 for the first time since May last year, according to Moneyfacts (Joe Giddens/PA) (PA Archive)

The total number of mortgages on the market has topped 5,000 for the first time since May last year, according to a financial information website.

But while the choice of products is widening, mortgage rates have been climbing, pushing up the cost of borrowing.

Moneyfacts counted 5,146 residential mortgage options available in April, breaching 5,000 for the first time since there were 5,087 deals in May 2022.

It was the highest total recorded by Moneyfacts since 5,356 mortgage products were available in February 2022.

Looking at different loan-to-value (LTV) tiers, Moneyfacts said the choice of deals for people with a 40% deposit, or a 15% deposit, is the highest on its records, going back to 2007.

It counted 702 products available for people with a 40% deposit and 806 deals for borrowers with a 15% deposit.

Many mortgage products were pulled from sale amid market turmoil following the mini-budget last year, but since then the mortgage market has been settling down.

However, higher mortgage rates will eat into borrowers’ costs.

Moneyfacts said average two and five-year fixed-rates rose between the start of March and the start of April, to 5.35% and 5.05% respectively.

At the start of March, the average two-year fixed-rate was 5.32% and the average five-year fixed-rate was 5.00%.

But for people with a 40% deposit, two and five-year fixed-rates have fallen month-on-month.

The average two-year fixed-rate in April in this bracket is 4.95%, down from 5.01% in March.

The average five-year fixed-rate for those with a 40% deposit is 4.65%, down from 4.76% in March.

Looking at variable mortgage rates, the average two-year tracker deal has breached 5% for the first time in 14 years, to sit at 5.02% in April, Moneyfacts said.

The average standard variable rate (SVR) mortgage in April was 7.30%. Homeowners often end up on an SVR when their initial mortgage deal ends. The average SVR is at its highest since February 2008, Moneyfacts said.

A string of Bank of England base rate rises has added to the cost of borrowing generally.

Borrowers comparing both rates and the overall mortgage packages would be wise to seek independent financial advice to assess the true cost of any deal, and to ensure it’s the right time for them to refinance

Rachel Springall, Moneyfacts.co.uk

Rachel Springall, a finance expert at Moneyfacts, said: “It is widely expected that fixed mortgage rates will reduce over the next few months, but this will be determined by fluctuating swap rates (which lenders use to price mortgages) and lenders’ appetite for business.”

She added: “Away from the fixed mortgage arena, variable interest rates have steadily been rising.

“The Bank of England base rate rose again last month to now stand at 4.25%, and our average standard variable rate has now hit 7.30%, its highest rate since February 2008.

“The average two-year tracker deal rate has also risen and breached 5% for the first time in over 14 years.

“Borrowers comparing both rates and the overall mortgage packages would be wise to seek independent financial advice to assess the true cost of any deal, and to ensure it’s the right time for them to refinance.”