Forty-one per cent of mortgage products have been taken off the market since Kwasi Kwarteng’s mini-budget last Friday, which sparked panic in financial markets, and expectations of a jump in the Bank of England’s base rate to 6% by next summer.
A further 321 products were withdrawn overnight, on top of the record 935 pulled the day before, according to Moneyfacts.
Between Friday and today a total of 1,621 residential mortgage products have been withdrawn leaving 2,340 on sale today.
According to Defaqto, more than 20 providers have withdrawn their entire fixed rate mortgage range.
Katie Brain of Defaqto said: “What products are left are changing at a rapid pace, lenders seem to be really unsure of what to offer and what price with so many changes in the money markets at the moment.”
Personal finance expert Martin Lewis said the forecast jump in interest rates to 6pc in 2023 would be “catastrophic for mortgage holders” as it would add huge extra costs each month.
He told ITV: “Clearly, many people will start failing affordability checks at that rate. So they’ll either be stuck on only their own company’s deals or going to a standard variable rate.
“And if house prices drop, that will hurt people’s loan-to-value ratios, which will make it even more difficult to get a cheap mortgage.”
Lewis said rising energy bills had already been pushing up interest rates, but the UK was now facing “self-imposed harm” due to Liz Truss’s tax-cutting fiscal plans.