TSB gives just four hours before withdrawing mortgage products
‘Make sure lenders give 24 hours notice before closing mortgage deals’: Brokers slam TSB as it AGAIN scraps all products with little warning
- HSBC has also been accused of not providing enough warnings about changes
- Mortgage rates are moving as further increases in base rates are expected
Mortgage brokers are calling on lenders to give at least 24 hours’ notice before pulling home loan rates.
It’s because TSB today has less than four hours’ notice before discontinuing a selection of its mortgage products.
TSB has notified lenders over lunch that it is withdrawing all its two, three and five year fixed rate home purchase products and remortgages, which pay a £995 fee.
TSB also said it would scrap some of its two-year, fixed-rate buy-to-let loans.
Brokers want lenders to commit to giving at least 24 hours notice before changing their mortgage products.
Other lenders, including HSBC, have slashed rates on a similarly short-term basis, leaving customers who don’t have time to complete a full application facing even higher interest rates.
Katy Eatenton, mortgage specialist at Lifetime Wealth Management, said: “Words fail me. This is not an email that will be well received at lunchtime on Monday.
A three-hour notice period for rate withdrawals does not take into account the client or the advisor. This is the fourth time TSB has done this in less than two weeks.”
Lenders are scrambling to reprice mortgage deals as financial markets bet on further rate hikes from the Bank of England to tackle inflation.
Today, according to Moneyfacts, the average two-year fixed interest rate has risen above 6 percent for the first time this year, to 6.01 percent. This is an increase of 5.98 percent on Friday.
The Bank of England is now widely expected to raise interest rates by 0.25 percentage point to 4.75 percent when its Monetary Policy Committee meets on Thursday
This rise is no longer seen as the last, and the Bank is expected to continue raising key rates this year, with the most aggressive economists and market commentators seeing a spike of 5.5 to 6 percent.
In response, swap rates – the main mechanism that lenders use to set their fixed rates – have risen and this is reflected in mortgage prices.
Rohit Kohli, operations director at The Mortgage Stop, said: ‘Surprisingly, TSB has done this again.
“Questions have to be asked about their leadership and approach to pricing their products if they have to respond so often – this is the fourth change in just two weeks.
‘The regulator should look into this to protect the consumer.’
Michelle Lawson, director and mortgage adviser at Lawson Financial, said: ‘Lenders will be forced to withdraw completely until the inflation announcement on 21 June and the subsequent Bank of England interest rate decision on Thursday.
“This is a tough time for anyone wanting a mortgage right now and really anyone in the industry.
“Someone needs to step in sooner rather than later and put this disastrous mess on a better path.”
Last week, a group of brokers launched a representative body, The Broker Collective, and it’s calling on lenders to give at least 24 hours’ notice before closing any deals.
Riz Malik, a member of the new body, said: ‘We want lenders to commit to giving all affiliated brokers a minimum 24-hour notice.
“We understand the issues caused by the sudden withdrawal of products, especially in a volatile financial market, which can create anxiety and stress for brokers who are critical partners in our industry.”
In addition, the group has asked lenders to “commit to clear, concise and open communication channels” and commit to working with brokers to “minimize disruption.”
In a statement, TSB said: “Like other lenders, we have responded to changes in the mortgage market to ensure we continue to maintain the standards of service that brokers and other customers expect.”