As lenders increase fixed rates, the action is a result of HSBC’s decision and is applicable to brokers and online applications.

Santander cancels mortgage agreements for new borrowers as the UK mortgage crisis worsens. As the unrest in the housing loan market shows no signs of abating, Santander is the most recent large bank to say it is temporarily removing its mortgage arrangements for new borrowers off sale.

Santander informed mortgage brokers that it would stop taking new applications for its “new business” residential and buy-to-let fixed and tracker rates at 7.30pm on Monday, with agreements not being available again until Wednesday, June 14, days after HSBC temporarily shut down its doors.

Although Santander stated that new packages for current customers remained available and that those who applied before 7.30pm would not be affected, the change applies to applications made via mortgage brokers and online.

Banks and building societies are continuing to reduce the availability of house loans, frequently with no advance notice, and increase the price of their fixed-rate agreements. In contrast, TSB will on Tuesday lower the cost of some of its new packages by up to 0.4 percentage points, which is better news for borrowers.

On Thursday at noon, HSBC said that all new business residential and buy-to-let products will be discontinued at 5 p.m.; deals would resume on Monday.

However, around three hours later, the bank announced that “due to significant demand,” it would be pulling the goods from sale with immediate effect. This was a sign of the fast-moving and chaotic market conditions. Prior to receiving the amended warning, some mortgage brokers stated they had waited in queue and been unable to contact HSBC for more than an hour.

We regularly examine our offerings in light of the shifting market conditions, a Santander representative stated. We will temporarily stop accepting new applications through intermediary and online channels starting this evening as we get ready for a relaunch of a full range of mortgage products on Wednesday morning. Customers who have already applied won’t be impacted, and our product transfer selection is still entirely available.

According to the financial data source Moneyfacts, the average rate on a new two-year fixed mortgage has steadily increased and was 5.86% on Monday, up from 5.26% at the beginning of May.

The number of residential mortgage offers available has, however, increased over the past few days; as of Monday, it stood at 4,952, up from 4,597 last Wednesday.

In the meanwhile, TSB announced that starting on Tuesday, it would lower rates on select two- and five-year packages across its residential and buy-to-let ranges by up to 0.4 percentage points. This might mean that it had set the price of its deals above the going rate.

Money market swap rates “have continued to see a steady increase, with no sign of falling, which is pushing lenders to continue to reprice,” said Nicholas Mendes, mortgage technical manager at broker John Charcol.

According to the LTV [loan-to-value], Halifax and HSBC boosted their fixed rates last week, with rates near or over 5%. Homeowners are under pressure to get a rate quickly if they are nearing the end of their fixed rate or are in the middle of a purchase application.