• Hundreds of residential mortgage deal offers in the U.K. have been pulled, with HSBC, Santander and NatWest becoming the latest major lenders to pause or change their offerings.
• Concerns about mortgage rates becoming unaffordable have spiked as fears of the base rate rising to 6% next year spread.
• British bond and currency markets have been in turmoil since Finance Minister Kwasi Kwarteng announced a "mini-budget" on Friday.

LONDON – Hundreds of residential mortgage deal offers in the U.K. have been pulled after market chaos sparked concerns about base rates rising as high as 6% next year.

Overall, 935 mortgage products were pulled from the market on Tuesday, according to data from money comparison site Moneyfacts. The company said this was the largest ever daily drop on record, with the previous high being 462 when the first U.K. Covid lockdown was announced in 2020.

HSBC and Santander are the latest major U.K. lenders to pause their mortgage product offerings, while NatWest repriced their products, increasing rates.

Santander said they halted some products for new customers and increased rates for both existing and new borrowers but would review their decisions "in light of market conditions."

NatWest and HSBC did not immediately respond to CNBC's request for comment.

Earlier in the week, Virgin Money, Halifax and Skipton Building Society temporarily pulled some of their mortgage deals citing market developments.

Concerns about mortgage rates becoming unaffordable have spiked among borrowers and lenders. There have also been reports of house sales falling through as lenders backed out of previously agreed mortgage deals due to market uncertainty.

The U.K. bond and currency markets have been in turmoil since Finance Minister Kwasi Kwarteng set out his "mini-budget" on Friday. Following his announcement, which includes major tax cuts and a shift to "trickle-down economics," the British pound fell to an all-time low against the dollar on Monday morning.

Meanwhile, the yield on the U.K. 10-year gilt soared to 14-year highs earlier in the week. These major market moves sparked inflation fears among investors and led them to believe the Bank of England would implement further interest rate hikes.

The central bank said on Wednesday that it would intervene in the bond market and postpone selling gilts, while temporarily buying bonds.

Markets quickly began to price in a base rate as high as 6% for next year – which dramatically pushes up how expensive mortgages are for borrowers as the base rate is the benchmark for U.K. mortgage and loan products.  

'Borrowers would be wise to keep calm'

A research note from Pantheon Macroeconomics suggested that for households looking to refinance a two-year fixed rate mortgage, payments could jump up by as much as £627 ($670) per month.

Concerns have also been raised about borrowers having fewer options when trying to find a mortgage deal due to the market chaos, which could drive prices up even further.

Despite this, Moneyfacts finance expert Rachel Springall said borrowers shouldn't panic.

"Borrowers would be wise to keep calm over the current volatility in the mortgage market and seek the advice from an independent broker. Various lenders have been very vocal that their decision to withdraw products is a temporary measure, amid the uncertainty over interest rates," Springall said.

Speaking to CNBC's "Street Signs Europe" on Tuesday, Imogen Bachra, head of U.K. rates strategy at NatWest, echoed a similar sentiment, explaining that she believed mortgage products being pulled is a temporary issue related to short-term market volatility.