"Major mortgage players are hauling in the sails after the wind changed. The dramatic overnight hike in market expectations of future rates has ramped up the cost of doing business, and lenders are taking a break to reassess and reprice," Sarah Coles, a senior personal finance analyst at Hargreaves Lansdown, commented in a research note.
The developments not only mean that mortgage prices are set to increase, but borrowers are also likely to have less options. A series of smaller lenders have reportedly already halted mortgage product sales over the last few months due to the pressures of rising rates, narrowing the market. This issue will only be exacerbated by major lenders suspending products, Rob Gill, managing director at Altura Mortgage Finance said.
"With borrowers already set to be hit by significantly higher mortgage costs, the reduction in choice caused by larger lenders withdrawing from the market will only make the situation worse," he said. "We've seen smaller lenders withdraw from the market fairly regularly in recent months as they struggle to cope with rising interest rates. The shift, however, to larger lenders such as Virgin Money and Halifax withdrawing rates is significant and a huge concern to mortgage borrowers."
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