No more mortgage from first direct for new customers

Consumers that are not already banking customers with the Internet bank first direct, which is part of the HSBC group, will not longer be able to access mortgage products from the lender.

The online bank has joined many other banks in restricting its mortgage lending in the light of financial turmoil in the mortgage lending market.

A spokesperson from the Internet bank said: “We’ve seen unprecedented demand for our mortgages since January thanks to our highly competitive pricing and the decision of other lenders to raise rates. As a result, we’re currently seeing applications running at five times our normal volumes.”

He went on to state: “first direct won its reputation for its amazing customer service and our first priority is to ensure we give all our customers the level of service they expect from us. 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.”

He added: “I’d like to apologise to customers for any delays they may have experienced and give them my commitment that we’ll not rest until we’ve restored first direct’s normal standards of service. We’ve made arrangements for our parent company, HSBC, to make available a similar two-year fixed rate to non customers to help them with their mortgage needs in the meantime.”