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Lenders axe hundreds of mortgages amid coronavirus uncertainty

Lana Clements
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Lana Clements

The number of mortgage products on offer has plunged by more than 1,500, as lenders turn their attention to operational issues thrown up by the coronavirus.

There were 5,239 deals on the market just three weeks ago on 11 March, but the number has since dropped to 3,654, according to analysis by Moneyfacts.co.uk.

Many of the products removed from the market are higher loan to value (LTV), and for new purchase customers.

This reduction reflects that bank resources have been moved to deal with existing customers, many of whom are applying for mortgage breaks.

A number of lenders have also agreed to extend mortgage offers after the government advised the majority of house moves should be delayed until social distancing measures have been relaxed.

Average two and five-year fixed-rates have remain broadly unchanged over the same time period.

Eleanor Williams at Moneyfacts.co.uk said: “With so much uncertainty at the moment, providers seem to initially be focusing on the support that their existing customers may need in the coming weeks.

“However, there may still be borrowers sitting on their provider’s standard variable rate (SVR) waiting to see what the impact of these rate cuts will be and by how much their monthly payments will reduce.

“With the difference between the average two-year fixed mortgage rate and average SVR standing at 2.39 per cent today, the benefit of switching to a new deal while rates are low is evident for those eligible, and would protect these customers from interest rate volatility in the future.

“We have to hope now that the mortgage market is able to rebound as quickly as we have seen it contract, once we begin to come out the other side of the Covid-19 crisis.”