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Major lenders temporarily pull mortgage deals amid market volatility
Banks and building societies are withdrawing mortgage deals in response to the financial turmoil sparked by the government’s Mini Budget last week.
Halifax, Virgin Money, Clydesdale Bank and Skipton Building Society all announced yesterday (Monday) they were temporarily removing mortgage products from sale, as the pound slumped in value.
In a statement, Halifax – part of Lloyds Banking Group – said it was withdrawing all products that come with a fee “as a result of significant changes in the cost of funding”.
Fee-paying mortgages allow borrowers to pay a fee in exchange for a lower interest rate. The bank added there was no change to product rates, and that it was still offering offer fee-free options for borrowers.
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Meanwhile, Virgin Money said that given “market conditions”, it was temporarily withdrawing mortgage products for new customers. The lender said: “Existing applications already submitted will be processed as normal and we’ll continue to offer our product transfer range for existing customers. We expect to launch a new product range later this week.”
A Skipton Building Society spokesperson confirmed it had temporarily withdrawn its mortgage range to new customers so it could “reprice following the market response over recent days”.
Clydesdale Bank, which is owned by Virgin Money, also confirmed a temporary withdrawal of products for new customers, while continuing to process existing deals and product transfer arrangements. It promised further updates later in the week.
The mortgage chaos is part of the ongoing fallout from the government’s Mini Budget last week, in which chancellor Kwasi Kwarteng announced a raft of tax cuts that will require a large increase in government borrowing.
In the wake of the Mini Budget, the value of the pound fell to record lows, prompting fears of another rise in interest rates, with this uncertainty behind lenders’ decisions to pull their products.
The Bank of England said last Thursday it would not hesitate to change interest rates “as much as needed” to combat rising inflation.
The base rate is now 2.25% after the seventh consecutive increase last Thursday.
Halifax’s changes are to take effect on Wednesday, while the Virgin Money, Clydesdale and Skipton Building Society decisions have already been brought in to effect.
