MORTGAGE shelf-life in the UK has nosedived amid the Iran war with experts warning that “getting a mortgage is like playing whack-a-mole at the moment” and urging those with a deal ending in six months to secure a new one as soon as possible.
Mortgage activity during February resulted in a significant fall in the average shelf-life of a mortgage to 14 days, recorded on the first of March, according to a new report from Moneyfacts.
In a complete turn-around from the seasonal slowdown during January, the market is now entering a period of uncertainty amid global pressures.
The last time the shelf-life was as short was at the start of August 2023, at 13 days.
As a comparison, the average shelf-life was 15 days at the start of October 2022, when the “mini-Budget” had an unprecedented impact on mortgage choice.
Overall product choice dipped month-on-month, but remained above 7,000 options.
Remortgage customers will find the incentive to switch has intensified, as fixed rates are substantially lower than the average Standard Variable Rate (SVR).
The average SVR fell to 7.13% month-on-month, now down by 0.55% year-on-year from 7.68%. The highest recorded was 8.19% during November and December 2023.
Borrowers cannot afford to be complacent and wait
Rachel Springall, Finance Expert at Moneyfacts, said: “Borrowers looking to refinance would be wise to act quickly to secure a new deal, as the significant push in mortgage activity during February has led to a significant fall in the average shelf-life of a mortgage to just 14 days.
“This is a complete contrast to the notable seasonal slowdown in activity during January. However, since this data was captured, there has been a notable shift in swap rates, amid the unrest seen in the Middle East. It is worth noting that the average shelf-life of a mortgage has not been this low, 14 days, for over two years, last lower for August 2023, at 13 days. This was just one month after a record low of 12 days recorded for July 2023.
“The general optimism heading into 2026 for the market might have suffered a bit of a setback, as it is looking incredibly unlikely that the Monetary Policy Committee will favour a cut to the Bank of England Base Rate (BBR).
“The reason rests on the uncertainty surrounding tensions in the Middle East; this puts pressure on inflation, gilts and as a casualty, swap rates – the latter drives the cost of fixed rate mortgages. A hold to the BBR should not delay borrowers from refinancing, as they can still save a significant sum by moving off a Standard Variable Rate (SVR).”
Martin Rayner, Director at Compton Financial Services, urged borrowers to secure a deal now before it’s too late.
He added :”With mortgage shelf-lives collapsing to just 14 days, borrowers cannot afford to be complacent and wait until the last minute. The smartest move right now is to secure a rate up to six months early. This acts as an insurance policy: if rates go up, you’re protected; if they come down, you can switch to the lower rate before you complete.
“It’s the only way to guarantee you get the best rate over the next six months, rather than gambling on a single day. Don’t assume your current lender will give you the best deal, but don’t rule them out either. While locking in a new deal with a different lender up to six months early is crucial, it’s worth checking if your existing bank has a better ‘hidden’ customer rate three months before the end of your term.
“In this volatile market, even a small rate change makes a huge difference. The difference between waiting and acting now could be massive. On a typical £300,000 mortgage, shaving just 0.2% off your rate saves you £1,200 over two years.”
Even a small rate change makes a huge difference
Wesley Davidson, Director at Bristol-based FD Commercial & Bridging, said this isn’t as bad as 2022’s crisis.
He added: “Mortgage products are being pulled faster than at any point since the mini-Budget. A 14-day average shelf-life means lenders are repricing in real time. The six-months-early point is right. Lock a rate now, you have optionality if rates fall before completion.
“Wait, and you’re pricing on whatever day the market decides to move against you. What I’d add: this isn’t 2022. Lenders aren’t in crisis mode, they’re repricing on swap rate movement. That means things can normalise quickly too.
“The borrowers who get hurt are the ones sitting on SVRs above 7% thinking they’ll time the bottom. You won’t. Get off it now.”
Samuel Mather-Holgate, Managing Director & IFA at Swindon-based Mather and Murray Financial, said securing a good rate is becoming hard.
He added: “Getting a mortgage is like playing whack-a-mole at the moment, when you smash one higher rate down it just leads to another lender raising its rates. Banks don’t seem to know what pricing policy to implement and rates aren’t staying around long enough to plan.”
It is not a total disaster
Justin Moy, Managing Director at Chelmsford-based EHF Mortgages, said borrowers have been caught out by the Middle East conflict, but reassured those who are panicking.
He added: “Given the gradual improvement in the mortgage market recently, it has been easy to put off decisions on the next mortgage product, but the Middle East conflict has caught borrowers out in particular, who are perhaps not ready to remortgage, or react to the cry of mortgage brokers busily trying to save money for their clients.
“In reality, we are back to pricing at rates around last Christmas time, so it is not a total disaster, but it just shows how important preparation is when looking for a new mortgage deal or buying a property, so you can act quickly and grab a cheaper deal. Lenders still have plenty of money to lend, and plenty of appetite to lend too, we just all need to ride out this short-term hiccup in the market.”
