MORTGAGE product choice has contracted by around 10% since the start of March, with higher loan-to-value deals (10% or less deposit or equity) falling by 14%, a blow to first-time buyers (FTBs) in particular, new research from Moneyfacts has found.
One broker said that while there are still lots of headwinds, “things are moving in the right direction”, while another added “now offers a perfect opportunity to get a property for a bargain price”.
Overall product choice rose month-on-month, up by 583 options, but this represents less than half of the deals lost the month prior (1,283). Lenders pulled products from sale due to uncertainty over the future path of interest rates.
However, mortgage product churn has calmed, with the average shelf-life of a deal doubling from eight days to 16 days.
Since the start of April, the average two-year fixed rate fell by 0.06%, and the average five-year fell by 0.07%, to 5.78% and 5.68%, but these rates stand higher than at the start of March, 4.84% and 4.96%, respectively.
The Moneyfacts Average Mortgage Rate fell for the first time (month-on-month) since January 2026, to 5.66%, but remains higher than at the start of March at 4.90%. While the average two- and five-year fixed rates at 95% loan-to-value (LTV) remain above 6%.
Bearing the brunt
Rachel Springall, Finance Expert at Moneyfacts, said: “Borrowers may feel partially relieved by the period of calm after absolute mortgage mayhem, but first-time buyers bear the brunt. Lenders slowly brought back deals and shifted to making cuts over hikes during April.
“Unfortunately, there is much more room for improvement, as the product choice overall is still down by around 10% since the start of March, as less than half the deals lost have returned. First-time buyers will be frustrated to see the choice of higher loan-to-value (LTV) options drop by 14% since the start of March (90%, 95% and 100% LTV).
“Thankfully, the calm of product churn during April compared to the upheaval in March, resulted in the average shelf-life of a deal returning to a more realistic window, doubling from around a week to just over two weeks (eight days to 16 days).
“First-time buyers or those with little equity of just 5% hoping to grab a two- or five-year fixed deal will find average fixed rates remain above 6%. It is essential that new buyers in particular feel supported, to keep the market moving, but affordability strains are evident.
“Higher interest rates, the lack of affordable housing and the potential for a spike in the cost of living can all damage the mortgage market. Support and innovation from lenders will be vital to keep the market moving.”
Positive signs
Emma Jones, Managing Director at Runcorn-based Whenthebanksaysno.co.uk, said: “First-time buyers, as expected, are feeling the pain of recent mortgage market volatility the most. Product choice is down more than the average at higher LTVs and average fixed rates with just a 5% deposit are above 6%.
“But it’s worth noting that there have been positive signs in recent weeks, with lenders cutting rates across the board after the sharp spike in March. However, there is still a long way to go.
“The one positive for FTBs is that they hold all the cards when they are making an offer on a property and can buy at a more competitive price compared to the start of the year.”
Omer Mehmet, Managing Director at Welling-based Trinity Finance, added: “As these figures from Moneyfacts show, the mortgage market is still a shadow of its former self.
“But things are starting to improve, with rates coming down and the shelf-life of mortgages now twice what it was a month or so ago. There are still lots of headwinds but, for now at least, things are moving in the right direction.”
Negotiate hard
Babek Ismayil, CEO at homebuying platform OneDome, said: “Conditions for FTBs may be challenging at present in the mortgage market, but in the property market they are very favourable, as they are in a position to negotiate very hard on price.”
Katy Eatenton, Mortgage & Protection Specialist at St Albans-based Eatenton Finance, also said buying conditions favour FTBs: “Conditions for first-time buyers are by no means ideal but they are better than what they were at the end of March, when the uncertainty caused by the conflict in the Middle East was extreme.
“Though there’s less choice for FTBs, there is still enough choice overall and this segment of the market remains active, as aspiring buyers are very alive to the fact that now offers a perfect opportunity to get a property for a bargain price.”
Photo by Javier Quiroga on Unsplash
