British lender Virgin Money joined Skipton Building Society yesterday to temporarily withdrew their mortgage ranges for new customers, thanks to the volatility in sterling funding markets.
“Following a number of changes in the market, we have made the decision to temporarily withdraw all our products for new customers at 8pm tonight,” Virgin Money said in its email to brokers, seen by Reuters.
“It makes sense that shares in Virgin Money have gone up after it suspended some mortgage deals,” said AJ Bell’s Russ Mould.
“The rise in the cost of long-term borrowing can hurt mortgage lenders unless they can push up their own lending rates to allow for a small profit margin. Therefore, Virgin Money pulling certain deals means it can recalculate what it needs to charge to still make money.
“Under normal circumstances, mortgage lenders could do this work while still having the full range of products available to customers, but everything is moving at such a rapid pace that banks need to take stock of events and not get caught out.”