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NatWest is latest lender to hike mortgage rates

NatWest is latest lender to hike mortgage rates

NatWest has become the latest lender to increase rates as the shift away from record-low mortgage deals continues.

The lender has upped rates across its core residential range by up to 0.9 percentage points and reduced the amount of cashback on offer by up to £250.

Rates on two-year fixed rate purchase products have been increased by up to 0.16 percentage points, while five-year fixed rates have gone up by up to 0.1 percentage points.

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The biggest increase is on a five-year fixed rate remortgage at 85 per cent loan-to-value (LTV), which has been increased by 0.9 percentage points.

NatWest has also increased rates on its first-time buyer deals, shared equity scheme and Help to Buy: shared equity scheme.

But it has cut its buy-to-let five-year fixed rate mortgage at 60 per cent LTV from 2.59 per cent to 2.5 per cent.

The changes come after brokers told FTAdviser it could be an opportune moment for clients to look at longer-term fixed rates following a wave of rate rises.

Martin Stewart, director at London Money, said: “The argument for longer-term fixes is more compelling now than at any time in the last six years.

“Swap rates have been going up and that has been driving lenders to raise rates. It requires a detailed conversation with the borrower as to what they want to do. If they are selling in two years, five years won’t be suitable.

“If they are confident they are happy to be there for the next five years, they would be very wise to look at current five-year money. Everyone’s circumstances are different."

On Monday (2 October), Halifax, the UK’s largest mortgage provider, increased rates by up to 0.2 percentage points.

Mark Bullard, head of sales at NatWest, said: “Having reviewed our product portfolio in line with the prevailing market conditions, we are introducing changes to our mortgage rates that include a number of rate increases on our residential deals and a rate reduction for a buy-to-let purchase mortgage.  

"Swap rates have risen recently, on the expectation that interest rates will begin to rise in the near future, which has increased the cost of funding.

“We continue to maintain a strong appetite for buy-to-let business and have reduced rates on a number of our broker-exclusive deals.

"The changes we introduced last week to our buy-to-let proposition and the further enhancements we have planned for later this year, underlines this commitment.”