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Borrowers urged to "batten down the hatches" as NatWest hikes mortgage rates by up to 0.3%

Journalist: Justin Moy, Contributing Editor

ended 15. October 2024

Borrowers have been dealt another blow as NatWest has announced increases of up to 0.3% across the bulk of its fixed rate products. The move by one of the UK's largest lenders follows rises in the cost of wholesale funds in recent weeks due to oil price concerns and uncertainty ahead of the Autumn Budget. One mortgage expert warned borrowers to “batten down the hatches as the rate storm starts to rage".

10 responses from the Newspage community

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Ben Perks
Managing Director at Orchard Financial Advisers
As the Autumn Budget looms, mortgage rates have been put into a spin. After a few months or so of reductions, lenders are now starting to raise rates and many borrowers will not know which way to turn. NatWest are the latest lender to announce increases and it looks like they’ll be joined by many more lenders over the next few weeks. We need to get this Budget over and done with and, for the sake of borrowers, get back to falling rates and better times. After a sustained period of rates dropping, they're now heading back up. This news from NatWest is not good news for borrowers.
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Ken James
Director at Contractor Mortgage Services
Batten down the hatches as the rate storm starts to rage. It is no surprise that a big lender has started increasing rates, with the cost of lending rising not just for mortgage customers but for the banks as well. Given what's happening in the markets, this was unavoidable. There will be no choice but for the others to join as soon as their current funds run out. Ongoing leaks as to what the new goverment will be setting out in the Budget have only fuelled concern over the direction the market may now be heading. Let's hope this is just a bump in the road and we get back on track with the recovery we all want and need.
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Emma Jones
Managing Director at Whenthebanksaysno.co.uk
NatWest going north on rates should be noted by borrowers. This is a big lender making the cost of borrowing more expensive and will almost certainly see other lenders follow suit. If you're looking to buy or remortgage, lock into a rate as soon as you can. The Autumn Budget and the spectre of inflation due to the crisis in the Middle East are starting to feed through into markets. Borrower beware.
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David Stirling
Independent Financial Advisor at Mint Wealth
The rollercoaster continues with Santander and NatWest both putting rates up on Tuesday, following on from some smaller lenders at the tail-end of last week. Inter-bank swap rates increasing could cause more wobbles from other banks and we need to hold on tight to see what the next fortnight or so brings in the run-up to the Budget. The banks are in a strange place, trying to meet lending targets for the year but also not getting caught out giving cheap money or taking too much business and letting service standards slip. This goes to show how quickly markets can turn. Borrowers should never assume the status quo will continue.
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Hannah Bashford
Director at Model Financial Solutions
We are now likely to see more lenders rebalance their books. Borrowers look set to be battered by rates just before the Budget. It’s going to be a turbulent couple of weeks until the stalls are set out at the Budget so if you see a good deal, nab it and then get your adviser to keep it under review.
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Justin Moy
Managing Director at EHF Mortgages
These were inevitable increases given how Swap rates have increased over the past couple of weeks. Expectations of how the market will react to the 'painful' Labour Budget that is looming, coupled with nervousness around world oil prices increasing, makes for a tough narrative at the moment, and shows how sensitive our economy has become. Borrowers need to work swiftly and secure deals as soon as possible, just in case this trend becomes longer than originally planned. Just when borrowers we're on a roll, they have been rolled over.
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Tony Castle
Managing Director at PFG Mortgages
In a blow to borrowers, NatWest have made some sizeable increases to their mortgage rates. Being one of the first mainstream lenders to do so, we could now see others follow suit. We have had a sustained period of rate reductions so this should serve as a wake-up call to to borrowers. They need to snap up attractive rates before they disappear onto the horizon. Lock in or look out.
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Simon Bridgland
Director at Charwin Private Clients
Santander announced last week that they will be increasing some rates by more than a little from today,. So now NatWest have come out unashamedly as the first of the big six to make a significant increase, the others will follow, also looking to increase their margins following the recent increases in the cost of wholesale money. Natwest’s 0.3% increase may not sound like a lot, but on an interest only mortgage of £120,000 will make payments £360 more expensive per year. Those looking to secure money now before anymore increases, need to move fast, as all lenders march to the same beat of the drum.
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Rohit Kohli
Director at The Mortgage Stop
NatWest haven't slammed the brakes on rate cuts, with these hikes they have gone into full reverse leaving borrowers scrambling to secure deals while they can. With swap rates climbing and the Budget in two weeks, lenders like NatWest don’t have the certainty the government was promising to global businesses all day Monday to maintain their low rates and we can expect more hikes from others in the coming days and weeks.
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Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
The eagerly anticipated rate war has now all but disappeared now that two major lenders, most recently NatWest, have increased their fixed rates. The upbeat feeling in the property market was short-lived and now all eyes are on the Budget and the next Bank of England rate-setting meeting.