With the pound falling and a forecast of high interest rates, several mortgage lenders have temporarily stopped deals for new clients.

HSBC and Santander are some of the biggest lenders to pull mortgage deals, and Nationwide has said it will lift mortgage rates on fixed rate mortgages. Why are banks pulling mortgages now and what does this mean for you as a home buyer and homeowner?

Why banks are pulling mortgage deals

On Tuesday the 27th of September there were around 3,596 residential mortgage deals available, which is already a stark comparison to last year's 5,3151. The amount of available deals dropped by around 284 overnight, which may spark concerns over availability.

Following the mini-budget announcement by Kwasi Kwarteng, many lenders are currently struggling to price their products accurately, which is why many have temporarily suspended them. As a result of the mini-budget, and expected further tax cuts, sterling on the market is seeing volatility. This also comes in line with current interest rate rises and an expected interest rate of 6% next year.

With all these movements in the financial sector, it’s no wonder we’re seeing financial institutions exercising caution.

Which banks have pulled mortgage deals?

Skipton Building Society and Virgin Money have both temporarily paused any mortgage deals for new clients. Halifax, which is owned by the Lloyds Banking Group, has said they’re going to halt any current mortgage products where the fees associated typically have lower interest rates.

Other bank and lender changes include2:

  • HSBC is removing residential and buy-to-let mortgage sales to new clients
  • Post Office is temporarily withdrawing residential and buy-to-let mortgages
  • Santander has removed all 60% and 85% LTV (loan to value) to new customers
  • Santander has also raised lending rates on mortgage transfers
  • Yorkshire Building Society has withdrawn deals for new customers
  • Nationwide has increased rates on its 2, 3, 5, and 10-year fixed rate mortgages
  • Bank of Ireland has withdrawn all residential and buy-to-let rates
  • Atom Bank has temporarily withdrawn its entire mortgage range

While this list isn’t exhaustive, it indicates the level of change we’re seeing in the home buying circuit. It may seem concerning, but many of these institutions have stated that they will put their products back up once they have re-evaluated their financial positions.

All have also stated that they would continue to support their existing customers, even if you have just placed an application.

We’ve seen pulled mortgage deals before

While all of this is certainly stressful, especially with the current cost of living crisis and the general increase in consumer goods, it’s not the first time it’s happened. In fact, the housing market saw something very similar during the pandemic, with many lenders re-evaluating their product portfolios and fees.

During the nationwide lockdown, mortgage approvals as a whole fell, lenders tightened their lending criteria, and some lenders pulled their deals from the market entirely, which reduced the number of options for anyone shopping around.

Despite this, June 2021 saw an astronomical surge in house sales, with just under 147,827 reported sales3 coming through. This indicates that while things may seem choppy, there’s no need to panic. We simply need to wait and see what unfolds in the coming weeks and when in doubt, get in touch with a mortgage adviser.

Why you need expert mortgage advice now more than ever

While a variety of factors, including rates, house prices, and supply and demand can affect property prices, we’ve always been able to come back from this in the past.

At the moment yes, mortgage deals are slightly limited in terms of choice, but there are still plenty of deals available. This is why it’s more important than ever to work with an adviser, especially if you’re considering remortgaging early to get ahead of the increases. Not only do they have their finger on the pulse of the housing market, they know who you can work with and what lenders will offer you a mortgage.

If you’re considering buying a house but are concerned about the current changes, get in touch with a mortgage adviser today. We’re more than happy to offer advice and guidance, and walk with you through the mortgage process.

1The Guardian, 2022
2BBC, 2022
3Statista, 2022

Important information

Your home may be repossessed if you do not keep up repayments on your mortgage.

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