Despite only being six months into 2023, the mortgage market has certainly gone through enough changes and instability for a lifetime! Rates have increased, lenders have pulled rates and made changes to their affordability criteria to make borrowing more difficult. This is mostly due to the ongoing economic crisis that the country finds itself in. An overall increase in the cost of living has made the majority of people worse off financially. Because of this, mortgage lenders have become cautious about who they lend to and how much.
Mortgage Lenders Not Accepting New Mortgage Applications
The most common way that lenders have attempted to limit the risk factor of lending is by increasing mortgage interest rates. Not only does this increase ensure that they still make a profit on the money that they are lending, but it will also discourage potential borrowers who may not be able to afford higher interest rate loans if their financial situation changes drastically because of the economic crisis. As mortgage lender after mortgage lender increases their interest rates, some lenders are stopping lending completely on new mortgage applications and temporarily withdrawing from the market completely so that they can regroup and reprice their loans.
Santander Mortgage Application and HSBC Mortgage Application Closed
Santander closed all their mortgage applications today (Tuesday 13th June 2023). HSBC also closed for new applications from Thursday 8th of June 2023 until Monday 12th of June 2023. This is because they are withdrawing their rates and pricing them higher, and putting new products in the market. To be completely honest, the banks closing for business is not a good sign and indicates that many more lenders could do the same.
This doesn’t seem like a simple rate change but more of a complete restructuring of mortgage offerings. When things like this happen, it is usually an indicator of rates rising significantly, and lenders not wanting to lend with the products they currently have available. What can potential borrowers expect within the coming days and weeks? Unfortunately you should expect quite large rate rises. Lenders who were offering rates of 4% last month will most likely come back to the market with rates nearing 6% or more.
Speak to a Mortgage Advisor
If you are looking to start a new mortgage application, now is a more important time than ever to speak to a mortgage advisor first. The mortgage market is quite a tough place to navigate at the moment, and to stand any chance of getting a manageable rate and repayment, you must speak to a qualified professional broker. Our team of advisors at Oportfolio mortgages are experts in the mortgage market and are here to help you. Give our team a call or send us an email today to see how we can help.