"More lenders that are heavily reliant upon the swap rates to fund their products are pulling rates with little or no notice."
Foundation Home Loans and Aldermore have become the latest lenders to withdraw product ranges due to market volatility.
This morning, Foundation Home Loans announced: "Really sorry to be the bearer of bad news but I have just been informed that are we also withdrawing of all our special products for both buy-to-let and residential today. All DIPs on the special products will need to be submitted by the end of today (Friday 26th May) and all FMAs will need to be submitted by close of business on Thursday 1st June. No exceptions. We will have no products available from 5:30pm today until Wednesday 31st May."
Aldermore later announced: "We’re withdrawing all residential owner occupied and buy-to-let mortgage products - from 6pm today, 26 May."
Earlier today, The Mortgage Lender announced the withdrawal of all of its buy-to-let fixed rates, citing "increased cost of funding".
LendInvest has also withdrawn all of its fixed rate buy-to-let products and confirmed that a “new catalogue” of products will go live after the Bank Holiday.
Yesterday, Fleet Mortgages and Lendco announced the temporary withdrawal of products due to capital market volatility causing increased swap rates.
PR platform, Newspage, asked brokers for their thoughts.
Justin Moy, managing director at EHF Mortgages: "More lenders that are heavily reliant upon the swap rates to fund their products are pulling rates with little or no notice. Many of these lenders are for the specialist markets, rather than for the main residential clients, so the real effect is quite small, but with most of the high street already repriced this week, it has been a rough time for the mortgage market."
Katy Eatenton, mortgage and protection specialist at Lifetime Wealth Management: "What a time to be an adviser :) The panic that emails like this causes in brokers and clients alike is horrible. You cannot give clients proper time to consider product recommendations when there is a deadline to beat before the rate increases by up to 0.45% or disappears full stop."
Lewis Shaw, owner and mortgage broker at Riverside Mortgages: "I'm already sick of this, and it hasn't even started. Thanks to core inflation rising from 6.2% to 6.8%, it's sent gilts and swaps into overdrive which is the driving force behind all the lender and product withdrawals. Once again, this has the hallmarks of setting off a self-fulfilling spiral of rate rises as thousands of homeowners panic and try to remortgage. Lenders get swamped with too much business, and the only way out of the firing line is to hike their mortgage rates, and on we go around the roundabout. Burnout central, here we come again. All aboard the anxiety train. Whoop whoop."
Austyn Johnson, founder at Mortgages For Actors: "Swap rates go up, so do mortgage rates especially the specialists like foundation. They will be back but worth higher rates. The new budget will need to consider this."
Rob Gill, managing director at Altura Mortgage Finance: "We appear to be entering a credit crunch affecting smaller, specialist lenders with several withdrawing products citing volatility to credit markets after Tuesday's inflation figures. For the time being at least the impact is restricted to a handful of smaller lenders, although brokers and borrowers alike are keeping a close eye on the wider market for any signs of contagion."
