Mortgage warning! Product choice is dropping as rates...

The number of mortgages available to borrowers has hit the lowest level for more than a year, Moneyfacts has warned.

Analysis by the comparison website found that the number of available products in the residential sector plummeted by 517 over the month to leave just 3,890 on offer for September.

This is just above the previous low of 3,842 in April 2021, Moneyfacts said.

Borrowers are also facing higher rates.

The average standard variable rate (SVR) or revert rate for mortgages has increased for a ninth successive month, rising by 0.23% to 5.40%.

This is the largest monthly rise on Moneyfacts records going back to December 2007 and the highest Moneyfacts said it has seen this average rate in more than a decade.

Both the average overall two- and five-year fixed rates have also risen for an 11th consecutive month.

The average two-year fixed rate is 4.24%, the highest since January 2013 when it was 4.24%.

The equivalent average five-year fixed rate of 4.33% is the highest since November 2012 when it was 4.47%.

It comes amid fears that the cost of living crisis and rising interest rates will make it harder to buyers to get mortgages, creating a possible housing market crash.

Eleanor Williams, finance expert at Moneyfacts, said: “Would-be mortgage borrowers will find that the level of product choice they are faced with has dropped again this month, now down to a level not seen in over a year .

“This month began with 3,890 deals to choose from – a notable 1,425 fewer than the 5,315 products on offer in December 2021.

“The average product shelf life rose to 28 days in September, up from the record low of 17 days last month, but rather than this indicating a more stable mortgage market, when considered alongside the significant number of product withdrawals it may instead be a sign that lenders are tightening and condensing their ranges and focusing their product offerings.”