Mortgage deals drop 40% as market panics following ‘Mini-Budget’

Many lenders have either stopped offering fixed-rates or suspended all their mortgages as the chaos deepens.

The total number of mortgage deals on offer has plummeted by more than 40% in the last few days as the fall-out from last week’s Mini-Budget continues.

Lenders concerned about possible Bank of England interest rate rises are pulling their products with some suspending their entire mortgage range.

Virgin Money, Skipton BS, Post Office Money, Vida Homeloans and various Bank of Ireland brands were among the first to stop offering any home loans to new customers.

Total mortgage offers stood at 3,961 on Friday before the Mini-Budget was unveiled by Chancellor Kwasi Kwarteng, but as of Thursday this week after a drop of more 1,600, there were only 2,340, according to Moneyfacts.

Many other banks and building societies have withdrawn their fixed-rate mortgages, as customers seek some certainty over the rate they will pay.

Large penalties

The largest lender, Halifax, is not offering any mortgage deals with a fee. Some others, including Santander, Nationwide Leeds BS, HSBC and First Direct all raised the rate offered with their fixed loans. TSB has taken all its offers off the market except for 10-year fixed rates.

There were some reports of borrowers being prepared to pay large redemption penalties to free themselves from fixed-rate deals as they seek longer term arrangements.

Ray Boulger, John Charcol

“They haven’t reintroduced deals yet because they don’t want to be swamped if the deals are too cheap.”

Ray Boulger (pictured), senior mortgage technical manager at brokers John Charcol, told The Neg that many banks are struggling to price loans at present.

“They haven’t reintroduced deals yet because they don’t want to be swamped if the deals are too cheap,” he says.

He predicts the intervention by the Bank of England to buy government bonds has helped steady the situation, but the instability is likely to continue into the new year. Some property deals will inevitably fall through as buyers pull out.


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