The moves come amid concerns the Bank of England will raise interest rates to protect the pound, which has been plummeting since Friday’s mini-budget
Several banks have withdrawn mortgage loans from sale amid concerns over the value of the pound as it emerged hundreds of mortgage deals have vanished.
Skipton, Halifax and Virgin Money are among those that have pulled deals – and in the UK, 365 deals have been scrapped since the mini-budget on Friday.
Others that have pulled or changed deals include Nottingham Building Society, Bank of Ireland, Scottish Building Society, Leek United Building Society, Clydesdale Bank and Paragon Bank.
The moves come amid concerns the Bank of England will raise interest rates to protect the pound, which has been plummeting since Friday’s mini-budget spooked markets concerned it would add to inflationary pressures already affecting the UK economy.
The news comes as analysis shows hundreds of mortgage deals have disappeared from the market in recent days. Moneyfacts.co.uk found that on Friday last week, the day of the mini-budget, 3,961 residential mortgage products were on offer. By Tuesday, it had shrunk to 3,596 deals – a reduction of 365 compared to Friday, the analysis for the PA news agency found.
There are concerns the base rate could rise from 2.25 per cent to six per cent next spring. Yet there are fears the Bank of England may have to make an emergency rate rise amid plunging currency concerns.
The Express reports that average monthly repayments could rise by up to £800. Base rate increases that have already taken place in recent months mean a tracker mortgage now costs about £210 per month on average than it would have done before rate increases started last December.
Someone who took out a £200k two-year fixed mortgage in March last year, when the average rate was 1.5 per cent, would see their annual bill rise by £7,000 if rates were to rise to six percent, AJ Bell, the investment firm, says.
Meanwhile, UK Finance says a standard variable rate (SVR) mortgage is now about £132 more expensive per month.
Most mortgage holders are on fixed-rate deals. Yet 1.8 million such deals are due to end next year. And that means many could face a shock when their current deal ends.
Sarah Coles, a senior personal finance analyst at Hargreaves Lansdown, said: Within the mortgage market, more than three-quarters of people are protected by fixed-rate deals. However, for anyone whose deal is expiring or on a variable rate, higher rates will add significantly to their monthly costs.
She also said credit card holders should be mindful of the cost of their borrowing becoming more expensive, too. She said: Many credit card companies reserve the right to push up rates when the cost of doing business rises, so keep your eye out for notifications.