The AA is no longer offering mortgages to new customers, blaming lots of competition for its decision to withdraw in the mortgage market.
The AA told Which? Money that the 'highly competitive' market was behind its decision, effective from Wednesday 27 February.
Read onto find out what what this means is for that mortgage market, and what to complete should you already have a home loan or an agreement in principle in the AA.
AA Mortgages: what went down?
If anyone called the AA to investigate about a mortgage yesterday, they've already been surprised to listen to a recording machine informing them that mortgages were no longer open to new clients.
AA Mortgage website was still being advertising home loans until at least 11am on Wednesday, promoting the lender’s annual 'loyalty bonus', low minimum overpayments, and dedicated information team.
The website also informed customers they might manage their mortgage applications online Twenty-four hours a day.
The AA Mortgage website on Wednesday morning.
In reality, the AA's Mortgages had already been removed the market and the website has since been upgraded to reflect this.
Although Brexit might have had an impact on the housing industry overall, the AA told Which? Money that Brexit didn't play a role in the decision.
A spokesperson told us: ‘We've taken the decision to pause mortgages to new clients for the time being as the marketplace is highly competitive.’
How will existing AA Mortgage customers be affected?
The AA assured us that existing mortgage customers don’t need to worry. A spokesperson said: ‘Their mortgages will continue and there's no reason behind these to get worried.
‘[Existing customers] will, of course, continue being looked after.’
If you have secured an agreement in principle (AIP) with the AA, the lender says it will honour the sale so long as the mortgage is finished within Thirty days from the date you received it.
David Blake of Which? Mortgage Advisers suggests that, should you be while applying for a mortgage using the AA or had received an AIP from the lender, ‘You should seek advice quickly to determine whether the mortgage you’re applying for is the right one for you.’
What does this mean for that mortgage market?
The AA was a newcomer to providing mortgages, having only launched its Bank of Ireland-backed products in 2022.
When we checked in July 2022, the AA had 25 mortgages on the market, a comparatively small number compared with other lenders.
As a mortgage provider, the AA were built with a 68% Which? customer score, placing it joint 15th in our overview of the best and worst mortgage lenders.
In relation to competitiveness, our analysis found that the AA offered fewer cheap mortgages compared to average lender.
If the AA found it hard to survive in the present climate of low interest rates and extreme competition between lenders, it’s possible that more mortgage providers might be feeling the pressure, too.
On another hand, one less lender in the market means less competition for other banks and building societies.
The AA also told us that its decision might not be permanent, with the spokesperson adding: ‘We will always keep an eye on the market and if circumstances are right we will consider offering mortgages to new clients again.’
How to get the best mortgage for you
With AA Mortgages from the picture, the concept of lenders has shrunk very slightly – but there’s still lots of choice out there, and seeking to sort out the best idea deal could be confusing.
Watch our video for five top tips on finding a mortgage that suits your circumstances.
