Business

Mortgages withdrawn from sale as market reels after mini-budget

The market turmoil caused by Friday’s seismic mini-budget has hit mortgage offerings as providers withdrew partial and entire lending ranges.

Virgin Money and Skipton Building Society have temporarily withdrawn their entire mortgage product range, while Halifax, the country’s largest mortgage lender, said it is to remove fee-paying mortgages.

Fee-paying mortgages allow borrowers to pay a fee in exchange for a lower interest rate.

Britons warned of 6% interest rates – live updates

Halifax’s changes are to take effect on Wednesday, while the Virgin Money and Skipton Building Society decisions have already taken effect.

A number of other, smaller, lenders are understood to have also paused the sale of fixed deals.

Chancellor Kwasi Kwarteng’s announcement of the most extensive programme of tax cuts for 50 years, and the associated market upset, has traders expecting that the Bank of England will raise interest rates to 6% – even higher than it outlined last Thursday.

On Monday, the Bank fuelled those fears when, in a surprise statement, it said it “will not hesitate to change interest rates as necessary”.

That uncertainty around the future of rate rises has caused the withdrawal, one broker told Reuters.

“The uncertainty around the risk of an emergency rate rise is likely to see other lenders withdrawing products or increasing rates dramatically until they know the extent of how this all pans out,” Jamie Lennox, a director at Dimora Mortgages, said.

Read more:
Five reasons why pound’s ‘doom loop’ matters to you
Could mini-budget bankrupt UK? Your questions answered

Please use Chrome browser for a more accessible video player

Why has the pound fallen to a record low?

Parent company Lloyds said Halifax was making the changes to its mortgage product offering “as a result of significant changes in the cost of funding”.

Virgin Money made its decision “given market conditions”, a spokesman said in a statement, with already submitted applications to be processed as normal.

Click to subscribe to the Sky News Daily wherever you get your podcasts

The provider said it hopes to launch new products towards the end of the week.

Articles You May Like

Musk says Twitter to launch ‘Verified’ service next week with a ‘gold check’ for companies
Senior Tory joins growing rebellion trying to force PM into U-turn over onshore wind ban
Musk would back Trump rival in 2024 election – with former president under fire for dining with white supremacist
Former health secretary Matt Hancock finishes third in I’m A Celebrity
Ukraine War: UN warns of ‘disaster’