Mortgage product availability has contracted by approximately 10% since early March, with high loan-to-value options falling by 14%, according to data from Moneyfacts. The reduction particularly affects first-time buyers seeking mortgages at 90% LTV and above.
While overall product availability increased month-on-month by 583 deals in May, this follows a larger reduction of 1,283 products in April. Lenders have adjusted their ranges in response to uncertainty over the future path of interest rates, according to the report.
Rate movements and product churn
Mortgage product churn has eased, with the average shelf-life of a deal doubling from eight days to 16 days. Since the start of April, average fixed rates have edged down slightly, with the average two-year fixed rate falling by 0.06% to 5.78%, while the average five-year rate dropped by 0.07% to 5.68%.
However, both remain significantly above early March levels, when they stood at 4.84% and 4.96% respectively. The Moneyfacts Average Mortgage Rate declined for the first time month-on-month since January 2026, falling to 5.66%, though it remains higher than the 4.90% recorded at the start of March.
At higher loan-to-value tiers, the average two- and five-year fixed rates at 95% LTV remain above 6%. The average Standard Variable Rate currently stands at 7.13%, down 0.45% year-on-year from 7.58%.
Impact on first-time buyers
Rachel Springall, finance commentator at Moneyfacts, noted that first-time buyers face particular challenges. “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),” she said.
The market disruption has been attributed to global pressures caused by conflict in the Middle East, which affected the expected path of inflation and future rate setting. The uncertainty led lenders to pull deals and increase fixed rates during March.
Official data from the Financial Conduct Authority for Q4 2025 revealed that the proportion of lending to a single borrower at four times’ income rose to its highest levels since Q2 2021. Some building societies, including Nationwide, have introduced products at six times’ income to address affordability constraints.
Market data
Total product count across all LTVs stood at 6,784 in May 2026, compared to 6,201 in April. Product count at 95% LTV increased from 368 to 436, while 90% LTV products rose from 759 to 871.
The average two-year fixed rate at 60% LTV fell from 5.39% to 5.28%, while the five-year rate at the same LTV dropped from 5.43% to 5.35%. Average two-year tracker rates across all LTVs declined to 4.61%.
Affordability pressures continue to affect borrowers, with rental market challenges making it difficult for potential buyers to build deposits. The strain of high payments has led some borrowers to consider longer-term mortgages of 35 or 40 years to make initial payments more manageable, though this results in paying more interest overall.
Outlook
The mortgage market faces ongoing challenges from higher interest rates, lack of affordable housing, and potential increases in the cost of living. Product availability remains below levels seen in early March, with less than half of the deals lost having returned to the market. Springall advised borrowers to seek advice from brokers to stay informed about the latest deals and affordability options.
