Lenders Keeping Attention-Grabbing Mortgage Deals on the Market for Just 21 Days

Lenders are breaking records with ultra-low mortgage rates but hesitate and you’ll miss some of these deals.

Research from Moneyfacts reveals that the typical mortgage is now available for just three weeks. This is the shortest shelf life ever recorded, matching the previous all-time low from May 2017. It’s also nine days shorter than the average time mortgage deals were on the market in July.

Banks and building societies have recently been playing limbo under the 1% interest rate bar. How low can they go? Halifax recently launched a two-year fix at 0.83%, while Nationwide deal comes in at 0.87% and HSBC’s new two-year fix charges 0.89% interest. These offers draw headlines but don’t last long.

Market watchers have attributed the short shelf life of these mortgages to heavy interest and the relatively low amount of money that lenders allocate for them. Once those allocated funds are used up, the offer ends.

Locking in one of these rates requires moving quickly. Some borrowers can find the mortgage rate they’ll applying for discontinued while they’re in the midst of the process. 

Being quoted a rate by a broker or lender doesn’t guarantee you’ll receive it. You only lock in a mortgage rate when the full mortgage application is submitted to the lender. For home buyers, this can only be done with your offer is accepted and you’ve chosen a solicitor.

“And for both purchase and remortgage cases, the lender or broker will need to have seen the customer's documents—their proof of ID, address, income and bank statements—before their application can be submitted and rate secured,” Rosie Fish, mortgage expert at broker Habito, said.

Lenders are also yanking offers to launch even lower rates, as they try to keep up with competitors. If you accept a rate then find a better deal, you can switch up until completion. However, the deals with the cheapest interest rates may not be right for everyone. In particular, some of the mortgages with the lowest rates charge high product fees, which can erode the savings you’d see from a few percentage point drop on the rate.

Eligibility criteria for these mortgages can also be strict so you should be sure you'll be accepted before ducking out of another deal.