The number of mortgage products on the market for homebuyers to choose from are at their highest level since 2008, as competition among lenders intensifies, new figures show.
A total of 15,838 mortgage products were available in August, up 10 per cent on July when there were 14,395 products and the biggest monthly percentage rise since April 2011.
This was largely driven by a 16 per cent jump in broker products between July and August to reach 11,257, according to the Mortgage Advice Bureau’s National Mortgage Index published today.
“Fierce competition in the market is contributing to record low rates and a large volume of product launches,” Brian Murphy, MAB’s head of lending, said.
“A base rate rise is still hovering in the background, but the second half of the year often sees lenders pricing with year-end targets in mind and looking to attract new business.”
The data follow figures from the Bank of England out yesterday showing that mortgage approvals soared by 18 per cent year-on-year in August to 71,000 – marking a 19-month high.
This frenzied activity in the market is being driven by fear among borrowers that interest rates will rise, according to remortgage lender LMS.
In a separate survey released yesterday, the company said the number of those who anticipate rate rises has jumped in the past six months, from 16 per cent in February to 28 per cent in August.
Almost two in three people remortgaging in August did so to take advantage of lower rates, LMS said, while almost a third increased the size of their loan to pay off debts and make home improvements.
Mortgage rates have continued to drop to record lows, with two-year fixed rates dropping by 103 basis points (bps) year-on-year to 2.68 per cent in August, MAB said.
Three-year and five-year fixed rates also fell to record lows last month, with three-year pricing reaching 3.11 per cent – down by 68bps year-on-year – and five-year pricing reaching 3.24 per cent, down 97bps.