Banks and building societies removed dozens of mortgage deals from sale yesterday as homeowners raced to secure fixed rates.
Virgin Money and Skipton were among providers to take the step after a day of wild swings on currency markets which saw the pound fall to a record low of less than $1.04 against the dollar and a big sell-off of British government gilts.
Yesterday, Halifax, owned by Lloyds Banking Group and Britain’s biggest mortgage provider, announced that from tonight it will temporarily withdraw all deals offered via brokers which have an arrangement fee.
The bank told The Telegraph changes were as “a result of significant changes in mortgage market pricing we’ve seen over recent weeks”.
In summer last year Halifax was offering a two-year fixed rate at 0.83%. Today its two-year fix is 4.29%. Repayments on a £200,000 mortgage would jump by £330 a month for someone paying 1% moving onto the new rate of 4.29%
A spokesman for Virgin Money confirmed its decision to halt deals for new customers was due to the market conditions.
Both it and Skipton Building Society said they would issue a new range mortgage of deals in the coming weeks.
Mortgage deals which have product fees can result in lower monthly repayments for homeowners, with the fee being added to the total mortgage debt.
But although mortgage rates may be lower per month, the overall cost of the loan will be higher due to more interest accruing over time.
Halifax said it hadn't changed its mortgage rates and it continued to offer product fee-free options for borrowers.
HSBC said it had no plans to change mortgage offers, while Natwest said its rates were under "continual review in line with market conditions".
Neal Hudson, analyst at BuiltPlace, estimates that around 375,000 people will roll off a fix in the second quarter of next year, when markets think the base rate will hit 6%.
He told the Telegraph that someone who bought in the first half of 2021 – and so whose two-year fix expires next year, when the base rate could be 6% – will see their monthly repayments jump from below £900 to £1,696, or £800. This amounts to £9,600 a year more.