Top Mortgage News

Derin Clark

Derin Clark

Online Reporter
Published: 31/03/2020

Although mortgage rates have continued to fall, homeowners looking to remortgage may find it more difficult as many lenders have withdrawn their mortgage deals from the market in response to the Coronavirus pandemic.

Last week, we reported that smaller lenders were withdrawing products in the higher loan-to-value (LTV) range, but since then many high street mortgage lenders have also removed mortgage deals from the market. For example, today Nationwide has temporarily withdrawn all its high LTV mortgages to instead focus on supporting existing customers through the Coronavirus outbreak, along with processing ongoing applications. Our research has found that since the 11 March, there has been a total of 1,585 mortgage products withdrawn from the market.

The withdrawal of so many mortgage products from the market will not only make it difficult for those looking to get onto the housing ladder or move home, but also for those wanting to remortgage, especially if they own a small amount of equity in their property.

Last week the government announced that buy-to-let landlords could request a payment holiday of three months if their tenants were struggling to pay their rent due to Covid-19.
Landlords will need to be up to date with their mortgage payments to qualify and many lenders now offer online self-certification forms to apply for the mortgage payment holiday.

At the weekend, in a statement about the coronavirus pandemic, the Government revealed that it could be six months until the UK is fully back to normal, which for those who are already struggling financially could put added stress to their finances. For homeowners who do not yet need help with their mortgage but who are worried about how the coronavirus outbreak will impact their finances in the long-term, we’ve taken a look at some of the help available.

Mortgage providers will give customers’ who have exchanged contracts but who are unable to move home due to Coronavirus the option to extend their mortgage offer for up to three months.

UK Finance and the Building Societies Association (BSA) made this announcement today to help home movers who have been impacted by the Coronavirus outbreak. This announcement comes after the Government urged those planning to move home within the next few weeks to delay their move as part of the UK’s effort to slow down the spread of the Covid-19 virus.

Commenting on the announcement, Stephen Jones, chief executive of UK Finance, said: “Lenders recognise that many people looking to move into their new home are facing significant stress and uncertainty due to the impacts of coronavirus. Current social distancing measures mean many house moves will need to be delayed.

“It is clearly not appropriate for people shielding or self-isolating to move home. Therefore, where chains contain people in these groups, lenders, conveyancers and other professionals are working together to enable these customers’ moves to be delayed.

“Where people have already exchanged contracts for house purchases and set dates for completion this is likely to be particularly stressful. To support these customers at this time, all mortgage lenders are working to find ways to enable customers who have exchanged contracts to extend their mortgage offer for up to three months to enable them to move at a later date.

“If a customer’s circumstances change during this three-month period or the terms of the house purchase change significantly and continuing with the mortgage would cause house buyers to face financial hardship, lenders will work with customers to help them manage their finances as a matter of urgency.”

Robin Fieth, chief executive of the BSA added: “Lenders and borrowers face an unprecedented set of circumstances. People who would have been preparing and expecting to move house in the coming weeks now face a wait until Covid-19 restrictions can be lifted. Our hearts go out to them and our heads are clear that it would be unfair for these people to have to start their mortgage application all over again once life returns to a more normal state. A three-month extension of existing mortgage offers seems a fair and reasonable step to take.

"It is possible that some borrowers financial circumstances may change during the three months. If this happens, or the terms of the purchase change we will work closely with the borrower to achieve a sensible outcome."

Today, the Government has urged people not to move house in an effort to reduce the spread of coronavirus. This could not just impact those looking to move home but could also affect those looking to remortgage with a different provider, as they may find it difficult to get a valuation on their property completed. In addition to this, it was also reported this week that providers have started withdrawing their riskier mortgage deals, particularly those on 80% loan-to-value (LTV) and above, while Halifax has withdrawn all its mortgage products from a 60% LTV and above (via intermediaries).

Despite the current challenging housing market, there are still many highly competitive mortgage deals available. Here, we’ve highlighted the lowest rates available in our charts, but mortgage borrowers should keep in mind that the lowest rate available might not be the best deal for their personal circumstances. Instead, borrowers should consider factors such as product fees, flexible features and incentives, all of which can be found on our mortgage charts, when choosing the best mortgage deal.

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