Mortgages pulled from sale as market turns after mini budget | Economic news

Market turmoil caused by Friday’s seismic mini-budget hit mortgage offerings as providers withdrew partial and entire loan lines.

Virgin Money and Skipton Building Society have temporarily withdrawn their entire range of mortgage products, while Halifax, the nation’s largest mortgage lender, has said it will scrap paying mortgages.

Paying mortgages allow borrowers to pay fees in exchange for a lower interest rate.

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Halifax’s changes are due to come into effect on Wednesday, while decisions by Virgin Money and Skipton Building Society have already come into force.

The announcement by Chancellor Kwasi Kwarteng of the the largest program of tax reductions for 50 yearsand associates market upheavaltraders expect Bank of England to raise interest rates to 6% – even higher than he described last Thursday.

On Monday, the Bank fueled those fears when, in a surprise statement, it said it ” do not hesitate to change interest rates if applicable”.

This uncertainty around the future of rate hikes prompted the pullback, a broker told Reuters.

“Uncertainty around the risk of an emergency rate hike is likely to see other lenders pull product or raise rates significantly until they know how well this all plays out,” he said. said Jamie Lennox, director of Dimora Mortgages.

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

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

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

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