NatWest’s is cutting its mortgage rates for existing customers who want to switch products.
Before diving into the specifics of NatWest’s announcement, it’s crucial to understand some key terms:
- Mortgage Switcher Rates: These are the interest rates applicable to existing mortgage customers who choose to switch to a different mortgage deal within the same bank.
- Basis Points (bps): A unit of measurement for interest rates. One basis point is 1/100th of 1 percent. So, a 40 basis point cut means a reduction of 0.40% in the interest rate.
- Loan-to-Value (LTV) Ratio: This ratio compares the amount of your mortgage to the value of your property. For example, 60% LTV means the mortgage is 60% of the property’s value.
NatWest’s Rate Reductions: A Closer Look
Effective from 21 November, NatWest is introducing substantial rate cuts for its existing customers. These changes are particularly noteworthy for those considering switching their mortgage deals.
Two-Year Switcher Deals
- 60% LTV Mortgages: A reduction of 40bps, bringing the rate down to 5.40%, and notably, there is no product fee associated with this switch.
- 85% LTV Mortgages: Rates fall by 23bps to a new rate of 6.07%, again with no product fee.
- 90% LTV Mortgages: A decrease of 18bps, resulting in a rate of 6.24%, and this option also comes without a product fee.
Five-Year Switcher Deals
- 60% LTV Mortgages: There is a decrease of 29bps, setting the new rate at 5.11%, with no product fee required.
- 75% LTV Mortgages: Two options here – one sees a reduction of 26bps to 5.17% with no product fee, and the other, a more significant cut of 21bps to 4.95%, but this includes a product fee of £995.
Term End Date Adjustments
In addition to the rate changes, NatWest is also adjusting its term end dates for these mortgages:
- Two-Year Terms: The end date shifts from 31 January 2026 to 31 March 2026.
- Five-Year Terms: The end date changes from 31 January 2029 to 31 March 2029.
What This Means for You
Benefits
- Lower Interest Rates: Existing NatWest customers can benefit from lower interest rates, which can lead to significant savings over the term of the mortgage.
- No Product Fees on Most Options: The absence of a product fee on many of these deals further enhances the savings potential.
Considerations
- No Changes for New Customers: It’s important to note that these rate cuts are only for existing customers. If you’re looking to switch your mortgage to NatWest as a new customer, these rates do not apply.
- Fixed-Term Adjustments: The adjustment in the term end dates means a slightly longer commitment period, which might affect your long-term financial planning.