What is happening to the UK mortgage market?

As the value of the pound falls, it has been announced that nearly 3000 mortgage deals have been pulled. It is said that banks and building societies have withdrawn deals in anticipation of increasing interest rates.

Are you a first-time buyer or looking to re-mortgage? In this article, PK Group have provided insights to help you through these uncertain times.

The mini-budget has altered the outlook for interest rates. For instance, Halifax, the UK’s largest mortgage lender has withdrawn its fee-paying mortgage products where borrowers would pay an upfront fee in order to secure a lower fixed interest rate.

However, Halifax is not the only mortgage lender that has withdrawn its mortgage deals. As of Tuesday (27th September) morning, there were ‘3,596 residential mortgage deals available, 284 fewer than before the sharp fall in the value of the pound.’* This mass uncertainty is likely to have a knock-off effect on other lenders, provoking them to also withdraw products or significantly increase rates until there is more confidence in the way the market is panning out.

Why are lenders withdrawing deals?

It may well be that lenders are taking a moment to assess the reprice. The outlook for interest rates has changed, resulting in lenders needing to ensure their mortgage products are profitable, as well as affordable for consumers.

Lenders rate their individual mortgage interest rates against the Bank of England base rate, which increased to 2.25%. There has been speculation that the financial markets thought the base rate could rise to 4.5% by next spring. However, the uncertainty surrounding the government’s tax cutting budget means some analysts feel it may have to get to nearly 6% to restore confidence in the UK economy and control inflation.

What about my mortgage?

Well, it depends on the mortgage deal. With the majority of borrowers being on fixed-rate mortgages, there is a buffer there for the time being. However, this chaotic rise and fall of rates means that there is ultimately less choice and higher borrowing outlays when searching for a new mortgage deal.

For instance, a borrower who fixed at 2% a few years ago could now be looking at a 5% re-mortgage rate. Additionally, first time-buyers may now have to lower their budgets as a result of the higher mortgage costs.

Top tip

We would suggest that if your fixed rate is due to end, then start speaking to a broker 6 and half months before your fixed rate is due to end. A new fixed rate can be secured well in advance of your current rate ending and the mortgage offer is usually valid for 6 months.

Get in touch

Jonathan Birkett, PK Group’s mortgage, equity release and protection adviser is here to help you through uncertain times. If you have any questions regarding mortgages or equity release, please feel free to contact him on or send us an enquiry via our website. Additionally, if you have missed the mini-budget brochure, you can find it here: Mini-Budget-2022



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