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Natwest latest bank to hike mortgage and savings rates

Natwest latest bank to hike mortgage and savings rates

Natwest are the latest bank to increase its mortgage and savings rates following the Bank of England base rate rise earlier this month.

Natwest, Royal Bank of Scotland and Ulster Bank NI will all increase their mortgage standard variable rate by 0.25 percentage points to 4.24 per cent APR on residential products at the beginning of September.

The One account and current account mortgage customers will also see a rise of 0.25 per cent, but two thirds of all mortgage customers on fixed term products will be unaffected by the rate change.

Natwest will also pass the changes onto its savings products, implementing double the base rate increase to its Help to Buy Isa - now at 2.50 per cent AER.

The bank will now offer an interest rate of 1.50 per cent AER in balances up to £10,000 on its Savings Builder account - all savings rate increases will come into effect on 3 September.

A Natwest spokesperson said rates are increasing for 96 per cent of its customers with the minimum savings rate now at 0.20 per cent AER.

Les Matheson, chief executive of personal and business banking at RBS, said: "Helping our customers save for their future and develop a regular savings habit is important to us. That is why we are increasing the rate across some of our regular savings accounts by double the base rate increase."

Anna Bowes, co-founder of independent savings advice site Savings Champion, said "the devil is in the detail".

She said: "While NatWest has increased its Help to Buy Isa by 0.50 per cent, the rate increase on the majority of accounts is just 0.10 per cent - so most of those 96 per cent of customers who will see a rate rise will be sorely disappointed.

Ms Bowes, said it is interesting to see NatWest had referred to a minimum savings rate of just 0.20 per cent for all savers – possibly following the recent discussion paper released by the Financial Conduct Authority to set a basic savings rate for all savers.

She said: "If so, this is a good indication that savers should not get too hopeful about the banks having to declare a minimum savings rates - it is likely to be poor and certainly not a lifeline to a decent return.

"Savers need to vote with their feet and switch their savings from the high street banks, as far more can be found elsewhere."

In July, the Financial Conduct Authority announced plans to force banks to pay a minimum savings rate to their longstanding cash savers amid concerns these consumers were being shortchanged because they were not switching.

rachel.addison@ft.com