Short-term fixed-rate mortgage products have reached record levels of popularity, according to new data from Twenty7tec, with interest in longer-term options falling to the lowest level ever.
Analysis by the mortgage tech platform shows a 43.29% drop in the number of searches for 10-year fixed mortgages since May, while deals for two years or less account for more than half (52.04%) of all mortgage searches.
The changes mark a clear shift in sentiment, Twenty7tec says, with borrowers ‘playing the field’ in the face of uncertainty around interest rates instead of opting for long-term security.
‘Borrowers don’t want to be locked in’, said Nakita Moss, head of lender at Twenty7tec.
“They’re holding out for rate drops, and shorter fixes give them a chance to reassess sooner. That means more people are remortgaging, more are opting for short deals, and fewer are choosing to tie themselves in for the long haul.”
At the same time, interest in longer-term stability has plummeted. Six-to-ten-year fixed mortgage searches now make up just 13.14% of the market – their lowest share ever. Overall fixed mortgage search activity was down just 4% compared to June, suggesting that the market isn’t quiet – simply adapting to the changing needs of customers.
However, with searches for remortgages up 18.90% year-on-year, total mortgage search activity was 5% higher than the same month last year – the busiest July on record.
Twenty7tec commercial director Nathan Reilly commented:
“We’re not seeing hesitation – we’re seeing calculation. People are watching interest rates, reading the headlines, and being supported by advisers to opt for products that give them more short term flexibility.”
Lenders are responding to the changing market with an increasing number of products: the number of available mortgage variants hit a record 26,008 at the end of July, exceeding 26,000 for the first time.
Reilly added:
“For advisers, it’s a market that demands up-to-date insight, customer knowledge, and a strong product match. For lenders, it’s about keeping options open.”
