moneysupermarket.com: first direct temporarily withdrawing mortgage range

Commenting on first direct temporarily withdrawing its mortgage range to new customers, Louise Cuming, head of mortgages at price comparison site moneysupermarket.com, said: "This is yet another example of a lender taking action to manage volumes. We are seeing more and more ways of stemming inflow, with each move creating a precedent that can be followed by others.

"Some other lenders have already increased rates or withdrawn products for a few days, or restricted their best rates to lower loan-to-value customers or those within a smaller area. first direct's move marks dangerous new ground for borrowers and will perhaps be followed by other lenders anxious to manage risk and service.

"With the data first direct holds on existing customers, it is in a strong position to target low-risk clients with a strong credit profile. By switching volumes to its parent company, HSBC, on a slightly higher rate, it is not losing the opportunity entirely while ensuring slightly higher margins.

"Borrowers, new and old, may feel the rug is being pulled from beneath them but the vital thing is not to panic and shop around early if you are coming to the end of a fixed rate deal. first direct has stressed this is a temporary measure so we may well see it opening its doors again once the backlog has cleared."