Magellan Homeloans has announced that it is closed to new business.
According to the firm, the measure is in response to competitive pressures such as lenders reducing mortgage loan interest rates and increasing credit risk.
The lender confirms that decisions in principle and applications in the pipeline will not be progressed any further and that applicants who have paid administration or valuation fees to Magellan who are yet to receive a mortgage offer will have their fees refunded. These customers are urged to contact their mortgage broker.
The lender adds that it will continue to honour unexpired mortgage offers, although these will not be extended or materially varied, and that contractual obligations will still apply.
Magellan Homeloans chief executive Matt Gilmour comments: “The competitive landscape has continued to shift, mortgage loan interest rates are reducing when the cost of funding is rising, and some lenders are taking on more credit risk despite the volatile economic backdrop.
“Magellan has prided itself on maintaining excellent credit standards whilst helping customers who have been disenfranchised by high street lenders. However, we do not wish to compete in a market which we view as unsustainable.
“It is with great regret and sadness that the board has concluded that it is no longer a long-term viable business.”