Mortgage deals withdrawn in record numbers over rate rise fearson September 28, 2022 at 11:46 am

- Advertisement -
- Advertisement -
- Advertisement -
- Advertisement -

The number of mortgage products available has now halved since the start of December.

Two women look at houses in an estate agent's windowImage source, PA Media

The withdrawal of mortgage products hit unprecedented levels overnight, according to analysts.

Moneyfacts, a financial information service, said that 935 mortgage products were taken off the shelf compared with a day earlier.

It said that was the biggest daily drop it has ever recorded. It was double the previous biggest drop, which occurred during Covid.

This lowers the choice for people buying a first home or remortgaging.

A total of 2,661 mortgage products are still available – but that is half the number that were on sale at the start of December when interest rates started to rise.

The latest surge is the result of lenders’ expectations that the Bank of England will soon raise the benchmark rate significantly.

In order to prevent their own deals becoming too cheap in comparison with their rivals, lenders are withdrawing mortgage deals in order to re-price them. They are also guarding against an unmanageable surge in demand if they price too low.

Brokers are reassuring those who already have a mortgage, or an agreement for a new mortgage, that they will be unaffected for the time being. When they come to remortgage, they will find monthly repayments are likely to become a lot more expensive.

line

‘I’m worried I’ll lose the house’

Usman Ahmad

Image source, Usman Ahmad

When Usman Ahmad, his wife and two children moved into their house four years ago they thought it would be their “forever home”. But he is worried that higher interest rates may mean they can now longer afford to stay there.

When the family bought their house in Manchester in 2018, they fixed the mortgage at 2.05% for five years with monthly payments of £927, Mr Ahmad said.

Usman, a 33-year-old self-employed courier, said if he took out a fixed rate mortgage today he would be facing monthly payments of more than £1,250 a month.

“I’m thinking if that’s now, what are the rates going to be like in nine months’ time when I have to take out a new deal?

On top of rising energy and food prices, the higher borrowing cost could be the last straw.

“I’m worried about defaulting on the mortgage and losing the house,” Usman said.

line

‘Keep calm’

Rachel Springall, from Moneyfacts, said: “Borrowers would be wise to keep calm over the current volatility in the mortgage market and seek the advice from a independent broker. Various lenders have been very vocal that their decision to withdraw products is a temporary measure, amid the uncertainty over interest rates.

“Those looking to remortgage may find they have more equity in their home amid rising house prices, but first-time buyers may be struggling to find a property they can afford.”

Banner saying 'Get in touch'

What have been your experiences of trying to secure a mortgage since the summer? Share your experiences by emailing haveyoursay@bbc.co.uk.

Please include a contact number if you are willing to speak to a BBC journalist. You can also get in touch in the following ways:

If you are reading this page and can’t see the form you will need to visit the mobile version of the BBC website to submit your question or comment or you can email us at HaveYourSay@bbc.co.uk. Please include your name, age and location with any submission.

- Advertisement -

Discover

Sponsor

Latest

Tom Dumoulin announces ‘immediate’ retirement from cyclingon August 15, 2022 at 6:33 pm

Former Giro d'Italia winner and double Olympic silver medallist Tom Dumoulin announces his retirement from cycling "with immediate effect".Former Giro d'Italia winner and double...

Match of the Day analysis: Alan Shearer & Micah Richards react to VAR decisions against Liverpoolon September 30, 2023 at 11:00 pm

Match of the Day pundits Gary Lineker, Alan Shearer and Micah Richards discuss the controversial VAR decisions which ruled out Luis Diaz's goal and...

Gio Queiroz: Arsenal sign Brazil winger from Barcelona then loan to Evertonon September 13, 2022 at 1:00 pm

Arsenal sign Brazil winger Gio Queiroz from Barcelona, then loan her to Everton for the 2022-23 season.Arsenal sign Brazil winger Gio Queiroz from Barcelona,...

Eight children among 39 rescued from migrant boaton December 15, 2022 at 6:54 pm

A teenager is confirmed to be among the four people who died, while four others are still missing.This video can not be playedTo play...

Police release Nicola Sturgeon without chargeon June 11, 2023 at 6:14 pm

Ms Sturgeon says she is "innocent of any wrongdoing" after being released while more inquiries are carried out.Image source, PA MediaBy Debbie Jackson &...