Those looking to move currently have the highest number of mortgage products to choose from since the first national lockdown last March. At present, there are 3,215 mortgages to choose – the highest number for 11 months. Before the lockdown, there were 5,222 mortgages in the market.

Since October 2020 there has been a 42% increase in the number of mortgage deals available. This is the highest four-monthly rise in choice since 2007, according to Moneyfacts. This is a sign that the mortgage market is now stabilising after a difficult year and good news for borrowers looking to secure a good deal on their new home or for those looking to remortgage.

The impact of the pandemic

When the pandemic hit and we went into lockdown, mortgage choice fell sharply, and this continued on several months. Lenders withdrew many products as they waited to find out what the true financial impact of the pandemic would be. Borrowers with smaller deposits were very hard as lenders withdrew many high LTV products, leaving those with smaller deposits very few options. What’s more, many house builders put their release dates on hold impacting those who had a mortgage offer using Help to Buy. In fact, nine out of 10 mortgages for people with a 10% deposit were withdrawn between March and July.
Fast forward to 11 months later and choice is once again improving, particularly for those with small deposits. Lenders are less risk averse as the property market seems to have fared well with rising house prices and stable interest rates.

Options for first time buyers

First time buyers with a 10% deposit saw the number of mortgage deals available rise to 288,88 in January 2021. Not only was there a rise in product choice but the number of deals available quadrupled from October to February. In addition, there has been a fall in interest rates on mortgages. Competition among lenders appears to be returning, with the average cost of a two-year fixed rate for those with a 10% deposit falling 0.09% over the last month, while the cost of a five-year fixed rate deal fell 0.07%.  For those with a 5% deposit, the choice is still very limited and dependant on your circumstances.

Existing homeowners

For those looking to move home or remortgage, the number of deals available to choose from has significantly increased and there are currently around 500 different mortgages available for those with at least 40% equity in their home. In addition, the cost of a mortgage has fallen.

Interest rates charged on a two-year fixed rate mortgage for these borrowers have fallen 0.05%, while rates on five-year fixed rate deals have fallen 0.07%.

At The Mortgage Hub we have access to the whole of the market and will be able to match the right deal to your circumstances. Contact our team today.