Although mortgage turmoil eased in April, first-time buyers remain under pressure from reduced options and affordability, Moneyfacts data reveals.
Data shows the choice of mortgage products has shrunk by around 10% since the start of March, with loan-to-value deals (10% or less of deposits or equity) falling by 14%, which Moneyfacts says is a blow to first-time buyers in particular.
Total product selection rose month-on-month, up 583 choices, but that represents less than half of the deals (1,238) lost in the previous month.
Lenders have withdrawn the products from sale due to uncertainty about the future path of interest rates. Mortgage product activity has calmed and the average deal life has doubled from eight days to 16 days.
Since the start of April, the average two-year fixed rate has fallen by 0.06%, and the average five-year rate has fallen by 0.07%, to 5.78% and 5.68%, but these rates remain higher than they were at the beginning of March, 4.84% and 4.96%, respectively.
The Moneyfacts average mortgage interest rate has fallen for the first time (on a monthly basis) since January 2026, to 5.66%, but remains higher than it was at the start of March at 4.90%.
The average two- and five-year fixed rates remain at 95% AVA above 6%.
Fixed rates are still lower than the average ‘return to’ rate or standard variable rate (SVR).
The average SVR rate remains at 7.13%, down 0.45% year-on-year from 7.58%. The highest rate recorded was 8.19% during the months of November and December 2023.
Financial facts “Borrowers may be partly relieved by the lull after absolute mortgage chaos, but first-time buyers are bearing the brunt,” says financial expert Rachel Springall. “Lenders have slowly returned deals and shifted to discounting increases during April.”
“Unfortunately, there is much more room for improvement, as overall product selection is still down about 10% since the start of March, with less than half of lost deals returned. First-time buyers will be disappointed to see selection of higher LTV options down 14% since the start of March.”
“Global pressures from the conflict in the Middle East have completely upended the expected path of inflation and future interest rate setting, prompting lenders to withdraw deals and raise fixed interest rates.”
“Fortunately, the lull in product volatility during April compared to the turmoil in March has brought the average deal life back to a more realistic window, doubling from about a week to just over two weeks.”
“First-time buyers or those with little equity hoping for a two- or five-year fixed deal will find average fixed interest rates still above 6%. It is essential that new buyers in particular feel supported, to keep the market moving, but affordability pressures are clear. Rising interest rates, a lack of affordable housing, and the potential for a significant rise in the cost of living are all things that could hurt the mortgage market.”
“Support and innovation from lenders will be vital to keep the market moving. The pressure of higher payments will make borrowers consider a longer-term deal, such as 35 years or 40 years to make initial payments more manageable. However, this will mean paying more interest overall, so overpaying where possible to reduce the length of your debt and mortgage is wise.”
