London Daily

Focus on the big picture.
Monday, Jul 20, 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Some mortgage deals have been withdrawn by banks and building societies due to volatility in the pound following the government's mini-budget.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
Brilliant move: Péter Magyar Moves to Nominate Chess Grandmaster Judit Polgár as Hungary’s President
Spain Defeats Argentina in Extra Time to Win Second World Cup
Current AI Seeks to Build an Open Global AI Infrastructure Outside Big Tech Control
Turkey Explores S-400 Transfer to UAE in Bid to Rejoin F-35 Program
Germany’s Economic Malaise Reopens the Sunday Shopping Debate
Singapore Considers Lower Taxes for Fund Managers as Hong Kong Intensifies Talent Contest
US Retaliates Against Iran After Two American Troops Killed in Jordan
Bank of Asia BVI Enters Court-Supervised Liquidation After Regulators Find It Insolvent
Proposed U.S.-Saudi Nuclear Pact Could Permit Limited Uranium Enrichment Under International Safeguards
Netherlands Declares Water Shortage Emergency After Drought Pushes Rivers to Historic Lows
Why Kentucky Fried Chicken Became KFC—and Why the False Explanations Persist
Iran Claims It Destroyed Bahrain’s Main Artificial Intelligence Center in Missile and Drone Strike
Ukrainian Drones Strike Wildberries Warehouses Deep Inside Russia
Brothers Andrew and Tristan Tate Who Turned "Toxic Masculinity" Into a Brand Arrested in Miami as Britain Seeks Their Extradition
Reported CIA Mission Helped Clear the UAE’s Path to Advanced US AI Chips
Artificial Intelligence Capital Fuels Markets While Governments and Regulators Face Mounting Strategic Tests
China’s Moonshot’s Kimi K3 Narrows the Gap With Anthropic Through Scale, Openness and Lower Cost
Gold and Cash Seizure Puts Indonesia’s Senior Anti-Corruption Prosecutor Under Investigation
The Ledger Will Not Trust on Faith
Bank of England Warns Climate Shocks Could Trigger Sudden Asset Repricing
UK Treasury Places Microsoft, Google, AWS and Oracle Under New Financial Resilience Rules
Scottish Government Faces Pressure Over Delays in Vulnerable Group Background Checks
Crown Prosecution Service Authorises Additional Charges Against Andrew and Tristan Tate
NHS Approves At-Home Cancer Treatments for Rare Blood Disorders
Bank of England Gains Oversight of Major Cloud Providers Supporting UK Financial System
UK Government Plans Major Overhaul of English Local Councils Through New Unitary Authorities
British Steel Nationalisation Dispute Escalates as Chinese Owner Jingye Seeks Compensation
Bank of England Signals Interest Rates Will Stay High as It Warns of Financial Risks From Climate and AI
Trump Administration Pressures Banks to Restrict Financial Access for Undocumented Immigrants
Passenger Bound for Germany Refused to Sit Beside a Woman on a Plane — Then Slapped a Flight Attendant
Ukraine’s Leadership Rift Spills Into the Streets as Protesters Target Army Chief
Ukrainian Drone Barrage Kills Eight and Strikes Russian Logistics Network
Key Trends to Watch
Financial Conduct Authority Warns Cloud and Digital Risks Are Becoming a Financial Priority
Jeffrey Donaldson Appeals Sexual Abuse Conviction as Democratic Unionist Party Opens Review
Welsh Health Authorities Launch Emergency Meningitis Vaccination Programme for Students
Scottish Business Activity Falls for Third Month as Companies Face Rising Costs
Bank of England Regulators Demand Better Access to Digital Banking Services
United Kingdom Cuts Bilateral Aid to Several African Countries by Up to Ninety Per Cent
United Kingdom Introduces Tougher Deportation Rules After Rochdale Exploitation Scandal
NHS England Launches Wearable Technology Plan to Reduce Sepsis Deaths
Amazon Web Services Billing Error Sends Trillion-Dollar Invoices to British Companies
Bank of England Takes Direct Regulatory Role Over Major Global Cloud Providers
Extreme Summer Heat Drives Record Fire Risk and Rising Deaths Across Britain
United Kingdom Nationalisation of British Steel Sparks Diplomatic Dispute With China
United Kingdom Economy Shows Weak Growth Ahead of Major Autumn Budget
Andy Burnham Set to Become United Kingdom Prime Minister After Labour Leadership Victory
The Ten World Cup Finals That Defined Football History
Smartphones Are Getting More Expensive, Sales Are Collapsing, and Even Apple Admits: "Prices Will Rise"
The Monaco Bombing Has Become a Test of Ukraine’s Intelligence Accountability
×