NatWest further increases mortgage rates

Effective tomorrow (16th February), NatWest is set to make changes to its product ranges for both new business and existing customers.

In terms of new business, borrowers can expect a rate increase of up to 0.10% and 0.20% on selected 2-year and 5-year deals.

For remortgages, rates will see a rise of up to 0.15% and 0.21% on specified 2-year and 5-year deals.

First-time buyers will face rate hikes of up to 0.10% and 0.11% on selected 2-year and 5-year deals, while those utilising Help to Buy shared equity for remortgages will experience increases of up to 0.10% and 0.21%.

Moreover, shared equity purchases will see rates increase by up to 0.10% and 0.20% on specific 2-year and 5-year deals.

Both Green purchase and remortgage deals will undergo rate hikes of 0.10% and 0.20%.

For Existing Customers, those looking to switch will face rate increases of up to 0.10% and 0.05% on selected 2-year and 5-year deals.

Nicholas Mendes, head of marketing at John Charcol, said: “Unfortunately, this is going to be a consistent theme amongst high street lenders over the next few weeks.

“As much as we would all want fixed rates to continue repricing downwards, swaps just don’t allow lenders the room to be able to hold where they are.

“Those who acted last month to secure a deal will no doubt feel an element of relief for acting quickly and not holding out in the hope rates were going to continue repricing downward.

“It’s still worthwhile securing a deal and continue to regularly review the market up until completion, or use a broker who can do this for you, which would certainly be less stressful.”

Newpage asked brokers for further responses, below.


Justin Moy, managing director at EHF Mortgages:

“Mortgage lenders are still reeling from the SWAP rate increases seen this last few weeks, so it is inevtiable further increases will be announced, NatWest are the latest to do to both homemover and remortgage deals.

“It will be interesting to see how rates are pricing over the coming weeks, as the economy adjusts to this recessionary period, and hopefully rate cuts become more likely in the coming weeks.”

Lewis Shaw, owner and mortgage expert at Shaw Financial Services:

“Sadly, due to the volatility in SONIA swap rates, we’ll see a wave of lenders increasing over the coming ten days until things calm down again.

“It’s another in the long line of reasons to be prepared when it comes to buying a home or remortgaging so that brokers can react and secure rates.”

Ranald Mitchell, director at Charwin Private Clients:

“The recent spate of rate increases by prominent lenders will do little to boost the confidence of a market in recovery mode.

“In isolation, these changes shouldn’t make much difference, however if a sustained trend of increasing rates manifests, borrowers could be deterred and put there plans on hold.”

Luke Thompson, director at PAB Wealth Management:

“I think at the minute the majority of these interest rate rises from lenders have been pre-planned with the increases in Swap rates in recent weeks.

“No lender seems to want to be the cheapest at the minute as they don’t want to get inundated with applications.

“With this in mind we will continue to see lenders jockeying for position to ensure that they are not top of the sourcing lists.

“A change in pace definitely for advisers compared to the start of the year.

“In terms of the longer term outlook I think there is potential for rates to fall.

“Yesterday’s inflation figure was more encouraging than expected and the news that we are in technical recession today will see the Bank of England eager to reduce rates once inflation is under control.”

Akhil Mair, director at Our Mortgage Broker:

“NatWest’s decision to hike mortgage rates by up to 0.2% across their residential fixed range echoes the recent moves by numerous other high street lenders.

“It reflects the ongoing adjustments in the mortgage market as lenders respond to evolving economic conditions and regulatory pressures.

“Homeowners should stay vigilant and explore their options in light of these changes.”

Ben Perks, managing director at Orchard Financial Advisers:

“These will have been in the works for a few days and not a snap decision following the recession announcements today.

“Whilst it’s not uncommon to see lenders raise rates at the moment, it does beg the question; how much further will they rise and when will they stop?

“Surely pricing will improve soon as markets react to the shallow recession we find ourselves in.”

Elliott Culley, director at Switch Mortgage Finance:

“The increases we have seen recently from mortgage lenders have the ability to spook borrowers into thinking there will be a return to higher interest rates.

“What we are seeing right now is the result of mortgage lenders reducing rates extremely quickly in January.

“A lot of the lenders squeezed their margins to attract new borrowers and now there has been a small but significant increase in swap rates, lenders are now having to backtrack on their rate reductions.

“Right now the market should continue to improve over the course of the year, but there will be bumps in the road where we will see increases to rates.

“Borrowers need to be proactive and remain vigilant in an ever changing market space.”