Nervous lenders have pulled more than 500 mortgages from the market in the past month, pushing up prices and leaving borrowers with increasingly expensive loans just as they face rampant inflation, rising taxes and higher energy bills. The number of deals borrowers can choose from plummeted from 5,356 at the beginning of February to 4,838 this week, according to Moneyfacts, an analyst. This was the largest drop since May 2020 – when banks were preparing for economic mayhem and house sales had come to a halt due to the pandemic. The advent of fewer deals has forced up the average rate charged on “variable” mortgages by 0.15% in the past month – the largest single increase ever recorded by Moneyfacts. Hopeful homebuyers now only have four weeks to secure a deal before a lender replaces it with a higher charge, the data showed. In February a borrower could mull their options for six weeks on average. Commentators have observed that banks are on the defensive, just as they were in 2020, given the economic outlook was fraught with uncertainty. As such, lenders are withdrawing deals on a daily basis and the frenzied nature of the market means customers are being forced to make snap decisions. The pace at which deals are withdrawn is leaving borrowers with little time to react. They might discuss a rate with a lender only to call back a day later and find out it’s gone. The vast majority of mortgages have gone up in price in the past month amid banks reluctance to compete and sell loans. Lenders have also braced for more interest rate rises by the Bank of England. The average two-year fixed loan was 0.21 percentage points more expensive, charging 2.65%, the highest since November 2015, Moneyfacts said. A five-year deal now carried 2.88% interest, some 0.17 percentage points more expensive than a month ago.

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