Lenders including Halifax pull mortgages from sale amid market volatility after pound plummets

Three lenders have temporarily withdrawn fee-based mortgages for new customers in response to market volatility caused by the fall in the pound.

Halifax, Britain’s biggest mortgage lender, is to withdraw the proceeds until it determines the interest rates to charge, according to Reuters news agency.

Virgin Money and Skipton reportedly followed Halifax’s decision.

It comes after the Bank of England announced it would raise interest rates “as much as necessary” in a bid to control inflation.

There are concerns that the Bank will have to raise rates again in a bid to stabilize the pound, after a series of increases in recent months.

The Bank has indicated that it will carry out a “full assessment” of interest rates at the next meeting of the monetary policy committee scheduled for November 3.

On Monday morning, the pound fell to an all-time low against the US dollar, falling more than 4% to just $1.03 before regaining ground.

Markets panicked over new Chancellor Kwasi Kwarteng’s mini budget on Friday, in which he announced controversial tax cuts worth £45billion – including the scrapping of the 45p for top earners, the reversal of his predecessor Rishi Sunak’s National Insurance hikes and stamp duty cuts – to break what he called the ‘vicious cycle of stagnation’.

Since his tax cuts are unfunded, they should be funded by the sale of gilts. Changes to the gilt market are impacting swap rates, which lenders use to decide how much to charge borrowers.

A spokesperson for Halifax, part of Lloyds Banking Group, said: “Due to significant changes in the cost of funding, we are making some changes to our product range.

“There is no change in product rates, and we continue to offer no-fee options to borrowers at all product terms and LTV (loan-to-value) levels, but we have temporarily removed matching products. of charges.”

Virgin Money said: “Given market conditions, we have temporarily withdrawn Virgin Money mortgage products for new business customers.

“Existing requests already submitted will be processed as normal and we will continue to offer our product transfer range to existing customers.

“We plan to launch a new product line later this week.”

Around 1.8 million households are expected to seek new mortgage deals when their contracts end next year, according to data from UK Finance.

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