NatWest has announced a significant update to its mortgage rates, affecting new and existing customers alike. Starting from today, 16th February, those looking to secure a new mortgage or remortgage their property with NatWest will find themselves facing higher interest rates.

If you’re in the market for a new mortgage, brace yourself for an increase in interest rates. NatWest has disclosed that rates for selected 2-year and 5-year fixed deals are on the rise. Specifically, new customers can expect increases of up to 0.10% and 0.20% respectively. This change means higher monthly repayments over the term of these deals, emphasising the importance of budgeting more carefully for your future home expenses.

Remortgaging Just Got More Expensive

Existing homeowners considering remortgaging should also prepare for rate hikes. The bank has outlined that specified 2-year and 5-year deals will see increases of up to 0.15% and 0.21% respectively. These adjustments could significantly affect your monthly outgoings, especially if you’re looking to lock in a new rate to save on interest.

First-Time Buyers and Help to Buy Schemes

First-time buyers, often seen as the lifeblood of the housing market, are not exempt from these changes. Rates on selected 2-year and 5-year deals for these newcomers will climb by up to 0.10% and 0.11%. Additionally, those utilising Help to Buy shared equity schemes for remortgages will face increases of up to 0.10% and 0.21% on their rates. Similarly, rates for shared equity purchases will increase by up to 0.10% and 0.20%.

Green Initiatives Also Affected

Even borrowers looking to make environmentally friendly choices aren’t spared, as both Green purchase and remortgage deals will see rate increases of 0.10% and 0.20%. This could potentially slow down the momentum of homeowners moving towards greener living solutions.

Existing Customers Looking to Switch

For existing NatWest customers contemplating a switch to a different mortgage deal within the bank, the news brings a mixed bag. Selected 2-year deals will see a moderate rate increase of up to 0.10%, while 5-year deals will experience a smaller rise of 0.05%. This suggests that while there are still opportunities to find a better rate, the window is gradually narrowing.

Industry Insight

Nicholas Mendes, a leading expert in the mortgage industry, suggests that this trend of rising rates is not exclusive to NatWest but is expected to be mirrored by other high street lenders in the coming weeks. The underlying cause, according to Mendes, is related to the cost of swaps, which essentially dictates the lending rates banks can offer. This financial mechanism leaves little room for lenders to maintain their previous rates, pushing them to adjust their offerings upwards.

Mendes also advises those who have recently secured a deal to feel relieved at their timing, as those waiting in hopes of further rate drops might find themselves facing these new, higher rates. However, he emphasises the importance of continuing to review the market up until completion, suggesting the use of a broker can alleviate the stress of navigating these changes.

What This Means for You

With rates on the rise, it’s crucial for prospective and current homeowners to reassess their financial plans and consider their options carefully. For those on the fence about locking in a rate, now may be the time to act before further increases come into effect. Engaging a mortgage broker could also provide valuable insights and assistance in navigating this shifting landscape, ensuring you secure the best possible deal amidst these changes.