Lloyds Banking Group PLC (LSE:LLOY)-owned Halifax confirmed it will be removing fee-paying mortgages amid concerns rising interest rates will leave them out of the money.
Fee-paying mortgages let borrowers pay a sum to decrease the interest rate on their repayment.
Virgin Money UK PLC (LSE:VMUK) and Skipton Building Society temporarily withdrew their whole mortgage product range following Friday’s mini-budget, while HSBC Holdings PLC and Santander UK also pulled new mortgage deals.
Chancellor Kwasi Kwarteng unveiled the most extensive programme of tax cuts for 50 years, but the scale of the borrowing necessary to fund it has sent the pound sinking and sparked speculation the Bank of England will have to intervene heavily to support the currency.
Traders have said the Bank of England will hike rates to 6% compared to 2.25% in teh latest rate hike last Thursday.
Halifax, which is the country’s biggest mortgage lender, confirmed its changes will come into effect from Wednesday, while Virgin Money and Skipton Building’s moves are already in place.
Parent company Lloyds insisted Halifax made the alterations to its mortgage product offering "as a result of significant changes in the cost of funding."
Several smaller banks have already or are expected to pause fixed deal sales.
"The uncertainty around the risk of an emergency rate rise is likely to see other lenders withdrawing products or increasing rates dramatically until they know the extent of how this all pans out," Jamie Lennox, Dimora Mortgages director, commented.
Lloyds shares eased 0.4% lower in early afternoon trading but Virgin Money jumped 2.5%.