NatWest has become the latest major high street lender to announce a series of mortgage rate increases, with hikes of up to 0.24% coming into effect from Friday. This move aligns with similar actions taken earlier in the week by banking giants Barclays, HSBC, and Nationwide, all occurring just ahead of the Bank of England's latest interest rate decision.
Detailed Rate Adjustments Across Product Ranges
The increases will affect NatWest's New Business, Existing Customer, and Additional Borrowing (ADBO) product ranges. Specific changes include a notable 0.24% rise on its 5-year fixed rate purchase mortgage at 80% loan-to-value (LTV) with a £1495 product fee, moving from 3.91% to 4.15%. A similar product with a £995 fee also sees a 0.24% increase, from 3.96% to 4.20%.
Impact on Various Borrower Profiles
Other products are experiencing slightly smaller adjustments. The lender's 2-year fixed rate purchase mortgage at 90% LTV (with a £995 product fee) is increasing by 0.14%, from 4.08% to 4.22%. Meanwhile, a 2-year fixed rate remortgage product at 75% LTV (also with a £995 fee) is rising by 0.18%, from 3.86% to 4.04%.
First-time buyers are not exempt from these changes. NatWest's 5-year fixed rate First Time Buyer product at 90% LTV, which features a £0 product fee and £250 cashback, is increasing by 0.18%, moving from 4.32% to 4.50%.
Industry Experts Weigh In on the Market Shift
Shaun Sturgess, Director at Swansea-based Sturgess Mortgage Solutions, offered a measured perspective. He suggested that while rates are edging upwards slightly, it is not yet a cause for panic. "The Bank of England is widely expected to leave rates on hold today due to the slight rise in inflation," Sturgess commented. "We may not get as many cuts this year as originally hoped if inflation doesn't improve."
He also highlighted positive market factors, stating, "Though rates have risen a little, let's not forget the many positives out there such as improved affordability that have started to make a positive difference for buyers over the past six months. Improved lending criteria mean many people are now finding it a little easier to borrow comfortably and plan their next move with confidence."
A Warning on Rate Volatility
Katy Eatenton, Mortgage & Protection Specialist at St Albans-based Lifetime Wealth Management, provided further context. "Rates have been rising across the board this week ahead of today's base rate decision, which is expected to be a hold," she noted.
Eatenton emphasised a crucial lesson for borrowers: "What these rate increases highlight is that the direction of mortgage pricing can change very quickly and that borrowers should never assume rates will only go in one direction, because they don't." This sentiment underscores the current volatility in the mortgage market as lenders adjust their offerings in anticipation of central bank policy.
