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Mortgage lenders pull deals after pound plunges amid market chaos

Mandatory Credit: Photo by Dinendra Haria/LNP/REX/Shutterstock (12853561d) A woman looks at houses for sale displayed in an estate agent's office window. The Bank of England raised interest rates from 0.50% to 0.75%, back to pre-pandemic levels in efforts to tackle inflation. It is estimated that 2.2 million mortgage borrowers with home loans linked to the base rate will be affected. Experts predict UK inflation rate, currently at 5.5% could increase to above 8% next month. Bank of England increases interest rate to 0.75%, London, UK - 17 Mar 2022
Three lenders have so far withdrawn some of their products amid the uncertainty (Picture: Dinendra Haria/LNP/REX/Shutterstock)

Banks and building societies have withdrawn some of their mortgage deals from sale after the government’s mini-budget sparked massive market turmoil.

Virgin Money and Skipton Building Society have temporarily pulled their entire range, while Halifax said it will remove fee-paying mortgage deals amid the uncertainty.

The markets have been in turmoil since Chancellor Kwasi Kwarteng announced his and Prime Minister Liz Truss’s plan for the economy. The pound briefly dipped to an all-time low against the dollar on Monday morning

A total drubbing of the pound even raised the prospect of an emergency rate hike from the Bank. However, in the end, Governor Andrew Bailey merely released a short statement.

In it, he said that the Bank would change interest rates ‘by as much as needed’ to get inflation back to its 2% target.

Consumer Prices Index inflation is currently hovering at around 10%, and is expected to peak higher later this year.

epa10207064 UK and US currencies displayed on a table as the British Pound reaches a record low against the US dollar, in London, Britain, 26 September 2022. The sterling's crash against the dollar comes after Britain's Chancellor of Exchequer Kwasi Kwarteng promised more tax cuts on top of the biggest tax cuts in decades announced last week, pushing the British pound close to 1.03 USD, the weakest it has ever been on record. EPA/TOLGA AKMEN
The pound briefly dipped to an all-time low against the dollar on Monday morning (Picture: EPA)

Virgin Money said: ‘Given market conditions we have temporarily withdrawn Virgin Money mortgage products for new business customers.

‘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.’

Halifax also said it is withdrawing all mortgages that come with a fee.

‘As a result of significant changes in mortgage market pricing we’ve seen over recent weeks, we’re making some changes to our product range,’ it said.

‘There is no change to product rates, and we continue to offer fee-free options for borrowers at all product terms and LTV levels, but we’ve temporarily removed products that come with a fee.’

CARDIFF, UNITED KINGDOM - MARCH 10: A close-up of a Halifax bank sign on the high street on March 10, 2019 in Cardiff, United Kingdom. (Photo by Matthew Horwood/Getty Images)
Halifax said it is withdrawing all mortgages that come with a fee (Picture: Getty)

The Skipton Building Society said it had also withdrawn its offers for new customers, in order to ‘reprice’ given the market movement in recent days.

A spokeswoman said: ‘We have temporarily withdrawn our mortgage range to new customers. This is so we can reprice following the market response over recent days. A new range will shortly be back on sale.

‘Customers with applications in progress are not affected by this and our existing customer range still remains available.’

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