More major banks have changed their mortgage offerings as the financial market continues to reel from the turmoil caused by the fall in the value of the pound.
It comes after the pound fell to its lowest level against the dollar on Monday, after the Chancellor hinted that further tax cuts would follow those he announced last week in his mini- budget.
The Nationwide Building Society said it would increase its fixed rate mortgages from 0.90% to 1.20% starting Wednesday.
He said he was reacting to swap rates rising to “unprecedented levels in response to current economic conditions as the market priced in further expected increases in the discount rate.”
A statement said: “To ensure Nationwide’s mortgage pricing remains sustainable, it is raising two-, three-, five- and ten-year fixed rates from 0.90% to 1.20% – less than the increase in swap rate.”
Santander said it would withdraw various mortgage products starting at 10 p.m. Tuesday.
“We will be removing our 60% and 85% LTV products for new customers and increasing other rates for new and existing customers beginning at 10 p.m. tonight,” a spokesperson said.
“Customers who have already applied at that time will not be impacted. We are continually reviewing the products we offer in light of market conditions.”
Aldermore Bank said it had withdrawn all mortgage offers from 6 p.m. Tuesday.
A spokesperson said: “Due to current market conditions, we have temporarily withdrawn all of our mortgage rates. We will soon be launching new rates.
This follows Halifax, a trading division of Bank of Scotland and a wholly owned subsidiary of Lloyds Banking Group, announcing that it has temporarily pulled all of its fee-based mortgage products from the market.
It comes amid speculation that the Bank of England could rapidly raise the base interest rate to limit the risk of runaway inflation.
The central bank governor said he “would not hesitate to change interest rates as much as necessary”.
Henry Jordan, Nationwide’s Head of Mortgages, said: “The changes to our new line of business reflect the current interest rate environment, which has seen mortgage rates increase across the market in line with a rapidly changing economic environment.
The Bank of England’s chief economist said it’s hard not to draw the conclusion that recent market uncertainty will require a significant monetary response.
Huw Pill acknowledged the recent fall in the pound and said the Monetary Policy Committee (MPC) “cannot be indifferent” to the revaluation of financial assets seen in recent days.
Mr Pill, who delivered his speech at the Barclays-CEPR International Monetary Policy Forum, reassured listeners that the MPC’s commitment to bringing inflation back to its 2% target is unwavering.
“It’s hard not to draw the conclusion that all of this will require a significant monetary policy response,” he said at the event.
“We need to be confident in the stability of the UK economic framework.”
Chancellor Kwasi Kwarteng told investors in the city he believed the government’s approach would “work” and promised “close cooperation” with the Bank of England.