Moneywise: More lenders will cease offering new mortgages

The trend of lenders suspending mortgage products to new customers is likely to continue, according to a personal finance magazine.

Both First Direct and the Co-Operative Bank have ceased offering deals to new clients as a result of the credit crunch.

Rebecca Atkinson, news editor of Moneywise.co.uk, explained that other firms such as the Halifax and Nationwide have introduced a tier system which does not allow people with less than a 25 per cent deposit to purchase a new mortgage.

Some mortgages are being changed as often as once a week, she claimed.

“They have the choice to either put up rates or suspend lending altogether,” she said. “Increasing rates is the more popular route for lenders to go because the suspending of lending can damage reputations.”

It is fairly likely that other providers will stop offering new customers mortgage deals in the near future, Ms Atkinson added.

© Adfero Ltd

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