Consumers look for mortgage stability during uncertain times

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Eleanor Williams, Press Officer
Eleanor Williams, Press Officer / Finance Expert T: 01603 476205 E: Email Eleanor
22/09/2021

Consumers look for mortgage stability during uncertain times

The latest risk, availability and demand data from Moneyfacts Residential Mortgage Analyser shows that more than 80% of those searching for a mortgage in August were looking for a fixed rate product. This indicates that during these times of economic uncertainty, borrowers seem to prefer fixed rate mortgages, perhaps due to the ability to budget and the protection from future interest rate volatility that these can provide.

  • Those whose five-year fixed rate mortgages from 2016 are now maturing may be pleased to see that if they are searching for a similar product now will find that at 2.63%, the average overall fixed rate is 0.41% less than when they secured their existing deal.
  • Similarly, the average rate for two-year fixed mortgages at 2.38% is 0.08% below where the equivalent rate was in September 2019, so those coming off a two-year fixed rate may also be able to find a more competitive deal now than they had in 2019.
  • Availability of 10-year fixed rate mortgages remained relatively stable in contrast to the fluctuations in availability we recorded for two- and five- year fixed rate deals over the course of 2020. At 128 deals to choose from, the level of choice may be 31 less than in Sep 2019, but when compared to 2016 there is one option more than was on offer five years ago.

Consumers look for mortgage stability during uncertain times

The latest risk, availability and demand data from Moneyfacts Residential Mortgage Analyser shows that more than 80% of those searching for a mortgage in August were looking for a fixed rate product. This indicates that during these times of economic uncertainty, borrowers seem to prefer fixed rate mortgages, perhaps due to the ability to budget and the protection from future interest rate volatility that these can provide.

  • Those whose five-year fixed rate mortgages from 2016 are now maturing may be pleased to see that if they are searching for a similar product now will find that at 2.63%, the average overall fixed rate is 0.41% less than when they secured their existing deal.
  • Similarly, the average rate for two-year fixed mortgages at 2.38% is 0.08% below where the equivalent rate was in September 2019, so those coming off a two-year fixed rate may also be able to find a more competitive deal now than they had in 2019.
  • Availability of 10-year fixed rate mortgages remained relatively stable in contrast to the fluctuations in availability we recorded for two- and five- year fixed rate deals over the course of 2020. At 128 deals to choose from, the level of choice may be 31 less than in Sep 2019, but when compared to 2016 there is one option more than was on offer five years ago.


Moneyfacts demand data provides a unique insight into what consumers are searching for and is based on statistics obtained from visitors to Moneyfacts Mortgage API. Correct as at August 2021

Fixed rate market analysis

 

Sep-16

Sep-19

Sep-20

Sep-21

Two-year fixed rate product count - all LTVs

1,217

1,535

790

1,515

Five-year fixed rate product count - all LTVs

999

1,506

827

1,632

Ten-year fixed rate product count - all LTVs

127

159

118

128

Average two-year fixed rate - all LTVs

2.44%

2.46%

2.24%

2.38%

Average five-year fixed rate - all LTVs

3.04%

2.79%

2.49%

2.63%

Average ten-year fixed rate - all LTVs

3.34%

3.01%

2.69%

2.99%

Data shown is as at the first available day of the month, unless stated otherwise. Source: Moneyfacts Residential Mortgage Analyser 

 


Moneyfacts demand data provides a unique insight into what consumers are searching for and is based on statistics obtained from visitors to Moneyfacts Mortgage API. Correct as at August 2021

Fixed rate market analysis

 

Sep-16

Sep-19

Sep-20

Sep-21

Two-year fixed rate product count - all LTVs

1,217

1,535

790

1,515

Five-year fixed rate product count - all LTVs

999

1,506

827

1,632

Ten-year fixed rate product count - all LTVs

127

159

118

128

Average two-year fixed rate - all LTVs

2.44%

2.46%

2.24%

2.38%

Average five-year fixed rate - all LTVs

3.04%

2.79%

2.49%

2.63%

Average ten-year fixed rate - all LTVs

3.34%

3.01%

2.69%

2.99%

Data shown is as at the first available day of the month, unless stated otherwise. Source: Moneyfacts Residential Mortgage Analyser 

 

Darren Cook, Head of Analyser Products at Moneyfacts, said:

“The risk, availability and demand data from Moneyfacts Residential Mortgage Analyser evidences that mortgage consumers appear to appreciate the effect the Bank of England base rate and future inflation rates may have on interest rates as a whole and what type of mortgage they are looking at applying for. Our latest research shows that over eight in ten (81.04%) consumers looking for a new mortgage during August, searched for the availability of a fixed rate mortgage. That leaves less than 20% of consumers searching for a variable rate mortgages, which may indicate that a vast majority of potential new mortgage holders may be more risk-averse in the current economic climate.

“Currently, just under nine in ten (87%) of all fixed rate mortgages available on the market are either two or five-year initial rate deals, so appears that mortgage providers are recognising consumer sentiments in these two sectors, as analysis shows that 36.18% of consumers are looking for a two-year fixed rate mortgage and 28.40% are searching for a five-year deal. Longer term financial stability may also be in the forefront of consumers’ minds as the economy moves forwards, with 8.93% of demand taken up by those looking for a 10-year fixed rate mortgage.”

Darren Cook, Head of Analyser Products at Moneyfacts, said:

“The risk, availability and demand data from Moneyfacts Residential Mortgage Analyser evidences that mortgage consumers appear to appreciate the effect the Bank of England base rate and future inflation rates may have on interest rates as a whole and what type of mortgage they are looking at applying for. Our latest research shows that over eight in ten (81.04%) consumers looking for a new mortgage during August, searched for the availability of a fixed rate mortgage. That leaves less than 20% of consumers searching for a variable rate mortgages, which may indicate that a vast majority of potential new mortgage holders may be more risk-averse in the current economic climate.

“Currently, just under nine in ten (87%) of all fixed rate mortgages available on the market are either two or five-year initial rate deals, so appears that mortgage providers are recognising consumer sentiments in these two sectors, as analysis shows that 36.18% of consumers are looking for a two-year fixed rate mortgage and 28.40% are searching for a five-year deal. Longer term financial stability may also be in the forefront of consumers’ minds as the economy moves forwards, with 8.93% of demand taken up by those looking for a 10-year fixed rate mortgage.”

Notes to editors

Pioneering financial comparison technology for over 30 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfacts is the UK's leading independent provider of finance product data. For over 30 years Moneyfacts' information has been a key driver behind personal finance product decisions.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room with ISDN (01603 230551) and Skype (Moneyfacts).

 

Notes to editors

Pioneering financial comparison technology for over 30 years.

Moneyfacts Group plc is the UK’s leading provider of retail financial product data. Used by virtually every bank and building society in the UK, and supplied to the Bank of England, Financial Conduct Authority, Financial Ombudsman Service, HM Treasury, Prudential Regulatory Authority and UK Finance.

Our expert research team monitors the thousands of mortgages, savings, credit card, personal loan, business banking, life, pension and investment products in the UK.

Moneyfacts is the UK's leading independent provider of finance product data. For over 30 years Moneyfacts' information has been a key driver behind personal finance product decisions.

For more information about us please see our key facts.

Broadcast

Our broadcast suite enables our finance experts to appear in-vision for television, and we regularly comment live on national and regional radio.

To arrange an interview for radio or television, please contact our press department. We have an in-house broadcast room with ISDN (01603 230551) and Skype (Moneyfacts).

 

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Rachel Springall Press Officer / Finance Expert
Eleanor Williams Press Officer / Finance Expert