Race for cheap mortgages running out as interest rates rocket

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The average length of time the cheapest deals remain on the market has plunged to a low of just 17 days – down from the 21 days recorded in June. Last week the Financial Conduct Authority urged borrowers to consider their mortgage options and switch to a more cost-effective deal in a bid to save money. But the latest data from the Moneyfacts UK Mortgage Trends Treasury Report shows how the door to lower payments is slamming shut.

The shortest shelf life on record coincides with lenders increasing their rates for the 10th consecutive month.

At 4.08 percent the overall five-year fixed rate average has now jumped 10 times surpassing four percent for the first time since October 2014.

And the average overall two-year fixed rate has almost doubled since last December from 2.34 percent to 3.95 percent – the highest since February 2013.

These hikes will add hundreds of pounds to annual mortgage payments and come in the wake of the Bank of England’s decision last Thursday to raise the base rate to 1.75 percent.

The 0.5 percent rise was the sharpest rise for 27 years and is the Bank’s main weapon in the fight against soaring inflation which currently stands at 9.4 percent.

Eleanor Williams, finance expert at Moneyfacts, said: “Mortgage availability has dropped again this month.

“Not only are there now fewer deals for borrowers to choose from, but the average shelf life for mortgage deals has plummeted to a new low of just 17 days this month.

“This means that those looking for a new mortgage have the shortest length of time we have ever recorded to try to secure their deal of choice. 

“Would-be borrowers will also note that the rates on offer are continuing to climb.

“The average Standard Variable Rate has climbed to 5.17 percent so it’s clear that those on, or about to revert to an SVR, could save on their monthly mortgage repayments if they are able to lock into a new fixed deal.”

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