First Direct Halts New Mortgages

First Direct is withdrawing its mortgage range from new customers, while two other lenders have raised their rates for existing ones.

The internet and telephone bank said it was temporarily withdrawing mortgages after receiving five times the usual volume of applications in recent weeks.

At the same time, NatWest and Royal Bank of Scotland and Kent Reliance Building Society became the first lenders this year to raise their variable mortgage rates for existing customers.


First Direct Chief Executive Chris Pilling said: "The flood of interest in our mortgages has meant we're taking longer than we'd like to handle applications, especially from non-customers.

"Rather than increase interest rates dramatically to discourage new applications, we've decided to withdraw temporarily from offering mortgages to non-customers until we've cleared the backlog."

The group will continue to offer mortgages to existing customers, even if they do not currently have their home loan with it.

First Direct, which is part of the HSBC group, has 1.2 million customers and employs 3,400 people.

(CD/JM)