The mortgage market is growing increasingly competitive, thanks to record low rates and the ballooning availability of loans, a new report reveals.
According to Moneyfacts’ latest UK Mortgage Trends Treasury Report, the number of available products has hit a nine-year high in recent weeks, while average mortgage rates have fallen to new lows – with many lenders embroiled in a so-called ‘mortgage price war’.
The report reveals that the number of mortgage products on the market has increased by 849 in the past year alone – the highest annual increase on record.
It estimates that there are currently 4,460 products available – the highest number since March 2008, just before the financial crisis took hold.
Charlotte Nelson, of Moneyfacts, said that the “boom in products” was “largely due to the amount of competition in the market.”
The group’s report revealed that mortgage rates have already fallen to new lows this month – with the average two-year fixed deal currently at approximately 2.30 per cent and the average five-year fix at around 2.89 per cent.
In recent weeks, HSBC announced a five-year fixed deal as low as 1.69 per cent, while rival lender Atom Bank was reportedly forced to withdraw a 1.29 per cent five-year deal amidst ‘massive demand’. The product was described by The Guardian as “Britain’s cheapest-ever mortgage deal.”
Ms Nelson, of Moneyfacts, said: “Providers today do not only need to be price sensitive, but also offer borrowers a variety of features, to allow the customer to almost be able to tailor the mortgage to suit their needs.
“Given the multiple scenarios lenders now cater for, it is little wonder the market has seen product numbers shoot up.”