Reading Time: 2 mins
Some mortgage deals have been halted or withdrawn by various banks and building societies. This comes after the pound fell to a 37-year low against the US dollar. Virgin Money is just one of the lenders who have halted their mortgage offers for new customers.
Skipton Building Society have done the same as Virgin Money. Both lenders have said that submitted applications would still be processed based on previous deals. They have said new deals will be announced in the coming weeks, based on the changes within the market.
On the other hand, Halifax have said it will stop mortgages with product fees from Wednesday (28th September). The bank has said this is the result of significant changes within the mortgage market in recent weeks. However, they have said mortgage rates themselves have not been changed. They will continue to offer fee-free options for customers.
Other firms such as HSBC have said there are currently no plans to change any mortgage offers. NatWest have not yet changed any of their current mortgage offers, but have said they are continually reviewing their deals in line with the currently market conditions.
Why has this happened?
The pound tumbled against the US dollar after the mini-budget was announced by Chancellor Kwasi Kwarteng on Friday. The huge increase in the amount of government borrowing announced by the Chancellor has caused concern amongst investors about the country’s ability to meet the debt.
The Bank of England have since stated they will not hesitate to further increase interest rates due to these record lows.
A rise in the cost of borrowing in the long term has meant the cost of offering new mortgage deals is more expensive for providers. This, along with concerns of people rushing to get the best deals, has led to the decision to halt deals.