Some 204 low-deposit deals have been withdrawn by lenders, data from Moneyfacts found, and Saturday saw the biggest daily decline in products since the mini Budget, with 52 options pulled.
As of the morning of 24 March, a further 30 high-LTV deals have been removed.
The pricing of low-deposit mortgages has soared too, as Moneyfacts data showed that the average two-year fixed rate at 95% LTV had now gone up to 6.1%, while the typical five-year fixed rate at the same tier was 5.93%.
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said this would be a “shock” to first-time buyers, as many would not be able to save more than a 5% deposit due to the cost of living.
She added: “The cost to new borrowers will be harsh, the hikes to rates will add around £1,200 per year in the cost of borrowing £250,000 over 25 years if they took out a two-year fixed rate deal now, with a 5% deposit, versus the start of this month.”
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This is based on repayments at a rate of 6.1% currently, compared to the two-year average of 5.45% at the start of the month.
Springall said: “It is hoped that the mortgage deals [that] have been pulled will slowly return, but this will rely on a return in stability to the markets and reaffirmed confidence in the path or interest rate setting.
“Tomorrow’s inflation announcement is unlikely to make much of a difference, as all eyes will be on the future captures that shows how hard consumers’ pockets will be hit by the ongoing conflict.”
Mortgage market ‘upheaval’ goes on
Springall said there appeared to be “no rest in sight for more upheaval to the mortgage market”, with more deals withdrawn this morning.
This means, Springall said, the “availability of residential mortgages has shrunk by 21% since 6 March, and there are now less than 6,000 options”.
She added: “Swap rates continue to trail above 4%, so it is likely more lenders will need to reassess their ranges this week if they have not passed on a big-enough margin to cuts over the past few weeks. It will be essential for borrowers to seek independent advice to keep on top of the mortgage mayhem.”
There are currently 5,856 residential mortgages available, as of 24 March, down from 6,144 the previous working day. The average two-year fixed residential mortgage rate rose from 5.43% to 5.51% in a day, while the typical five-year fixed rate increased from 5.45% to 5.52%.
The average two-year tracker rate is 4.55%, unchanged from the previous working day.
On the buy-to-let (BTL) side, the number of products has fallen from 4,345 to 4,035, while the two-year fixed rate has risen from 5.05% to 5.12% and the five-year fix from 5.43% to 5.48%.
