London Daily

Focus on the big picture.
Tuesday, Oct 27, 2026

Mortgage lenders halt some deals after pound falls

Mortgage lenders halt some deals after pound falls

Some mortgage deals have been withdrawn by banks and building societies due to volatility in the pound following the government's mini-budget.

Virgin Money and Skipton Building Society halted mortgage offers for new customers, but said submitted applications would still be processed.

Halifax said it would stop mortgages with product fees, which can result in better repayment rates.

It comes as the Bank of England said it was monitoring the markets "closely".

The bank said it would "not hesitate" to hike interest rates to curb inflation, after the pound fell to a record low against the US dollar.

It came following Chancellor Kwasi Kwarteng's pledge to cut taxes further at the weekend, on top of Friday's mini-budget, where he announced the biggest tax cuts in 50 years.

The plans will require a large increase in government borrowing and concerns among investors about the country's ability to repay that debt led to the value of the pound being pushed down. The cost of UK government borrowing also climbed.

Some investors believe the government's tax cuts will lead to people spending more, which will push up prices. So in an effort to limit price rises, the Bank could raise interest rates sooner and faster.

The Bank of England said it would make a full assessment as to whether it should change interest rates at its next meeting on 3 November, following speculation it might have intervened earlier.

The statement has prompted predictions that interest rates could more than double by next spring to 5.8% from their current 2.25%, to curb inflation - the rate at which prices for consumers rise.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said if interest rates rise as predicted, the average household refinancing a two-year fixed rate mortgage in the first half of next year would see monthly payments jump to £1,490 from £863.

"Many simply won't be able to afford this," he said.


Inflation is currently running at a 40-year high in the UK at 9.9%.

Experts said a rise in the cost of long-term borrowing meant the current cost to mortgage lenders of offering new deals was expensive.

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.

Halifax said from Wednesday it would remove mortgage products that come with a fee "as a result of significant changes in mortgage market pricing we've seen over recent 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".

Newsletter

Related Articles

0:00
0:00
Close
Education or Indoctrination? The Growing Debate Over Religious Participation in British Schools
Germany's Vanishing Shopfronts: The Silent Collapse of the Businesses That Built Its Cities
Northern Ireland Executive Reaches Agreement on Public Transport Modernization and Cross-Border Rail Infrastructure Funding
Department for Energy Security and Net Zero Approves New North Sea Carbon Capture and Storage Industrial Clusters
Office for National Statistics Reports Stabilization in Private Rental Growth Across Major English and Welsh Regional Cities
United Kingdom Automotive Manufacturing Output Rises Moderately as Electric Vehicle Assembly Lines Expand in the Midlands
Competition and Markets Authority Launches Formal Inquiry Into Cloud Computing Infrastructure and Artificial Intelligence Partnerships
Scottish Government Finalizes Emergency Budget Adjustments Following Multi-Year Public Sector Funding Shortfalls
National Health Service England Announces Major Emergency Care Overhaul to Alleviate Severe Winter Capacity Pressures
Chancellor Rachel Reeves Prepares Autumn Budget Amid Intensifying Scrutiny Over Public Spending and Fiscal Rules
Bank of England Signals Cautious Approach to Further Interest Rate Cuts as Persistent Wage Growth and Inflation Pressures Remain
Transport for London Unveils Expanded Zero-Emission Bus Fleet to Meet Capital Air Quality Targets
Higher Education Institutions Face Deepening Financial Strain Amid Declining International Student Enrolment
Automotive Industry Leaders Criticize Government Tax Policies and Urge Action on Retail Consumer Confidence
Environment Agency Issues Flood Alerts Across Scottish and English Waterways Following Heavy Rainfall
Independent Audit Highlights Persistent Security Vulnerabilities Across Legacy Government Digital Portals
Northern Ireland Political Leaders Clash Over Westminster Funding Allocations Ahead of Autumn Budget
Ethnic Minorities in England Face Significant Disparities in Routine Breast Cancer Diagnosis Rates
National Police Chiefs Report Alarming Surge in Domestic Abuse Cases Fuelled by Expanding Illegal Cocaine Market
Government Announces Two Hundred and Twenty Million Pound Pothole Funding Boost for Local Highway Authorities
China Issues Formal Warning Over Potential United Kingdom Restrictions on Chinese Electric Vehicles
British Defence Ministers Sign E5 Pact to Enhance European Military Capabilities and Industrial Cooperation Within NATO
United Kingdom Business Activity Expands at Fastest Pace in Eight Months According to S&P Global Flash Survey
Chancellor John Healey Prepares Major Devolution Package and Bank Profit Surcharge Ahead of Upcoming Autumn Budget
National Health Service Consultants in England Announce Two-Day Strike Action Scheduled for November
Major Clean-Up Under Way Across Britain Following Destruction Caused by Consecutive Storms Austen and Boelo
KEY TRENDS TO WATCH
Declassified Intelligence Files Reveal British Security Services Monitored National Health Service Founder
British Government Launches Sweeping Regulatory Crackdown on High-Risk Cosmetic Procedures
Scottish National Party Demands Ban on Using Scottish Revenues to Fund English Nuclear Energy Projects
Mayor of London Initiates Landmark Pedestrianisation of Oxford Street to Revitalise Global Retail Hub
British Judges Granted Expanded Legal Powers to Punish Convicted Killers Who Refuse to Attend Sentencing
United Kingdom Poised to Miss Reduced International Aid Spending Targets Ahead of Fiscal Review
Surging Cocaine Consumption Drives Record Drug Fatalities and Rising Crime Rates Across Britain
Department of Health and Social Care Announces One Hundred and Forty Million Pound Boost for Urgent Care
British Services Sector Records Strongest Growth in Eight Months Despite Broader Economic Uncertainty
United Kingdom Retail Sales Suffer Unexpected Decline as Consumer Confidence Plummets
Greater Manchester Mayor Andy Burnham Urges National Debate on Restoring European Union Free Movement
Deep Cabinet Divisions Emerge Over Controversial Approval of North Sea Fossil Fuel Projects
United Kingdom Government Urges Citizens to Stockpile Essential Supplies in National Resilience Pivot
Storm Boelo Kills Two People and Cuts Power to Tens of Thousands Across Great Britain
Critical Software Flaw Forces Dozens of United Kingdom Government Services Offline Amid Mass Security Warnings
UK Consumer Confidence Tumbles Amid Rising Energy Costs and Global Commodity Price Pressures
North Sea Transition Authority Approves Production from Jackdaw Gas Field to Bolster Domestic Energy Security
Storm Boelo Leaves Tens of Thousands of Households Without Power Across Scotland and Northern Ireland
UK Government Launches National Be Ready Campaign Urging Households to Prepare Three Days of Emergency Supplies
Department for Environment Food and Rural Affairs Implements Stricter Water Quality Regulations for British Rivers
Welsh Government Launches Major Renewable Energy Initiative to Expand Offshore Wind Capacity Along the Coast
Northern Ireland Executive Reaches Final Agreement on Comprehensive Regional Infrastructure Modernization Plan
Office for National Statistics Reports Moderate Increase in British Retail Sales Driven by Autumn Discounts
×