First Direct has suspended new mortgage lending after being swamped by applications. The decision was taken after rival banks withdrew their mortgage deals because of worsening conditions in the money markets. Financial Times, The Times, Daily Telegraph
The bank, part of HSBC, the UK’s biggest lender, yesterday withdrew all loans to homeowners who were not already customers after it received five times the normal level of applications.
Meanwhile, NatWest and Royal Bank of Scotland, part of the same group, became the first lenders this year to raise their variable mortgage rates for existing customers with an increase from 6.2% to 6.45% from today.
First Direct has been inundated by applications since it offered two-year, fixed-rate mortgage deals of 4.95% – seen as one of the most competitive in the market.