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Can "average" data be unhelpful to consumers?

ended 23. June 2023

UK newswire, Newspage, asked brokers for their views on whether data being released daily about mortgage rates, specifically 2-year fixed rates, is useful intel for consumers or unhelpful data that doesn't reflect the reality many borrowers face. Their views are below.

7 responses from the Newspage community

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Ross McMillan
Owner/Mortgage Advisor at Blue Fish Mortgage Solutions
The media obsession with "average" rates on an almost daily basis is equivalent to Jim Bowen and his "let's look at what you could've won" taunt during Bullseye. Rates are changing constantly and without reference or context, headlines around these are misleading and dated and incredibly unhelpful to both borrowers and brokers. Bespoke, tailored and considered advice rather than clickbait and often contradictory headlines is what consumers require most in these volatile times and it's hard to comprehend what positive objectives might be achieved by headline writers simply adding confusion and pouring fuel onto already dangerous fires.
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
This kind of data is completely unhelpful, all the more so when yesterday I was securing rates in the mid-4% range. However, that's not as sexy a headline and won't get as many clicks.
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Jamie Elvin
Director at Strive Mortgages
There is certainly an element of fear-mongering with the average 2-year fixed rate being quoted at 6%. There are plenty of 2-year fixed rate products available at less than 6% for those with larger deposits. However, for those with higher loan-to-values or applying for mortgages on non-standard terms, the 6% figure is a reality.
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Craig Fish
Director at Lodestone Mortgages
While the data is true, it's misleading and should always be caveated. There is no such thing as an average customer or average circumstances. Just this week we quoted 5.34% to a customer, and a rate starting with a four for a buy-to-let customer. These 'averages' are used to generate headlines, and serve no purpose other than creating panic.
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Matthew Jackson
Director at Mint FS
This is the worst kind of sensationalist media reporting. I struggle to see the point, and would challenge the accuracy of these figures. Firstly, 2-year fixed rates make up only a small proportion of the mortgages we recommend, and at present they are priced higher than 5-year fixed products and variables. Only the higher loan-to-value products, or specialist products and lenders have rates significantly above 6%, so how is this average calculated? It feels like this is being used to whip up some panic. The reality is, don't believe everything you read online or in the press. Pick up the phone and speak to a broker to get the whole story.
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Jonathan Burridge
Founding Adviser at We Are Money
It is total headline-grabbing nonsense. Rates are rising and that is of concern to many, but "average" is such a dirty word because of the variables that determine the rate an individual borrower may access.
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Rob Gill
Managing Director at Altura Mortgage Finance
Borrowers should treat average mortgage rate data cautiously as the reality is often very different. With the average 2-year fixed rate currently reported as over 6%, several lenders still offer equivalent rates of around 5.3% for the right borrowers. While the average data may reflect the trend accurately, the figures themselves are often misleading.