NatWest is slashing mortgage rates, making it cheaper to get on the property ladder!

After a rollercoaster few weeks that saw mortgage rates soar above 4%, NatWest is bringing back sub-4% deals on its five-year fixed-rate mortgages. Just last week, the bank increased its five-year fixed rate to 4.09%, but it’s now offering the same deal for a much more attractive 3.84%.

This price drop comes with a £1,495 fee and requires buyers to have a 40% deposit (known as a 60% loan-to-value). If you’re looking for a shorter commitment, NatWest also has a two-year fixed-rate deal at 3.99% with the same deposit requirements.

But hold on, there’s more good news! NatWest is making big cuts to its two-year fixed-rate deal for those with a smaller deposit of 25% (75% loan-to-value). This deal has plummeted by a whopping 0.41 percentage points and now sits at 4.19% with a £995 fee.

Why the sudden change of heart?

The recent volatility in the mortgage market is due to something called ‘swap rates’. These rates, which are influenced by factors like expected future interest rates, play a big role in how lenders determine their fixed mortgage rates. Recent uncertainty surrounding potential tax increases in the upcoming Budget caused these swap rates to jump, pushing mortgage rates up.

Are NatWest’s deals the best on the market?

While NatWest’s new rates are certainly competitive, it’s worth noting that Halifax currently holds the top spot for both two and five-year fixed-rate deals at 60% loan-to-value. Halifax offers a five-year fix at 3.77% and a two-year fix at 3.94%, both with a £999 fee. Nationwide Building Society also offers similarly competitive rates.

The bottom line:

While it’s always wise to shop around and compare deals from various lenders, NatWest’s return to sub-4% five-year fixed rates is a positive sign for potential homebuyers. Keep an eye on the market as we approach the Budget, as things could shift again depending on the announcements.