Mortgage deals could be pulled within hours of the Budget

Mortgage deals could be withdrawn within hours of the Chancellor’s Budget speech, financial experts have warned.

The Chancellor, John Healey, is due to make his inaugural Budget speech at lunchtime this Wednesday.

Speaking to the website Newspage, Nouran Moustafa, Practice Principal of Roxton Wealth, said: “My biggest concern is a Budget built around unfunded spending commitments or optimistic revenue forecasts.

“Markets will punish a lack of fiscal credibility, and ordinary mortgage borrowers could end up paying the bill.

“If gilt yields spike and swap rates follow, lenders could withdraw products within hours and reprice within days.

“First-time buyers and households approaching remortgage would be particularly exposed.”

The Chancellor might be delivering the Budget, but hardworking families could end up paying a very expensive delivery charge.”

Agents could feel the impact within days as buyers, who have not yet secured a rate face higher costs before completion.

Stephen Perkins, Managing Director of Yellow Brick Mortgages, said: “The Budget could move mortgage rates very quickly if it changes financial markets’ view of inflation, Government borrowing or future interest rates.”

He agreed that market reaction to the Budget can push swap rates – on which mortgage rates are based – higher, and lenders can start repricing within days.

He also pointed out that “the biggest risk would be a significant increase in borrowing without a credible plan for how it will be funded”.

“Equally, a Budget that reassures markets on the public finances could help yields and swap rates settle,” he said.

“Borrowers should not try to gamble on Wednesday’s reaction. If a suitable mortgage is available now, secure it and keep reviewing the market in case pricing improves afterwards.”

Borrowing costs

Mike Staton, Director of Mansfield-based Staton Mortgages, said: “The Chancellor might be delivering the Budget, but hardworking families could end up paying a very expensive delivery charge.

“If the financial markets don’t like what they hear, borrowing costs could rise, and mortgage lenders could start increasing rates within days.

“Get the numbers right, and we could see rates fall instead. The markets aren’t interested in political spin or fancy promises. They want to know whether the country can actually afford what’s being announced.

“Don’t gamble your family’s mortgage on a politician getting their sums right. If your current deal is ending soon, speak to your broker and look at securing a competitive rate now.

“If rates improve, you may be able to switch to something cheaper before your new deal starts. The Chancellor might be balancing the nation’s books, but if the sums don’t add up, it’ll be ordinary families left counting the cost. Politicians make the promises, but it’s homeowners who could end up paying the interest.”