Copy article

NatWest increasing rates for existing borrowers "not a good look"

Journalist: Newsteam, Newsteam

ended 11. March 2024

NatWest has increased rates for existing borrowers. Effective 12th March, the lender says it's making the following changes to its Existing Customer product range:

  • Switcher: Rate increase of up to 10bps on selected 2 and 5 year deals.
  • Buy to Let - switcher: Rate increase of 5bps on 75% LTV 2 year deal with £995 product fee.

Newspage asked brokers for their views, which can be found below.

8 responses from the Newspage community

Copy all

Star Quote
Copy

Editor
Darryl Dhoffer
Founder at The Mortgage Geezer
NatWest joins the recent trend of lenders raising rates for existing borrowers. This comes despite a decrease in gilt rates and an expectation of falling SWAP rates in the coming weeks, following the stable and uneventful Budget. Ideally, declining swap rates should lead to lower mortgage rates from lenders in the near future. The key question is how quickly lenders will react to these falling rates. In the past, lenders have been swift to raise rates when swap rates increase. We can only hope they will be equally responsive when rates fall.
Star Quote
Copy

Gary Bush
Financial Adviser at MortgageShop.com
NatWest increasing mortgage rates for its existing borrowers at a time when the industry and market mood music is improving shows a lack of consideration by this lender for its cash-strapped customers. Due to new affordability calculations, many of NatWest's existing customers will be unable to switch to other lenders, so this is not a good look. Lenders have a captive audience due to affordability reasons but that doesn't mean they should profit from it.
Star Quote
Copy

Robert Timm
Managing Director at Sunland Mortgages
Only a small increase but a frustrating one given the market reaction to the Budget last week, Gilts rates have fallen and there's a hope SWAPs will follow suit, so to see an increase to start the week is like putting orange juice on your cornflakes.
Copy

Editor
Justin Moy
Managing Director at EHF Mortgages
This is the second time this month that NatWest has increased rates for their existing clients. Admittedly, it's not by a huge amount this time but collectively up to 0.2% this month. With Swap rates tipping down over the last few days, it seems an odd announcement. It certainly doesn't hand much loyalty to existing borrowers.
Copy

Platinum
Elliott Culley
Director at Switch Mortgage Finance
After a steady Budget and a positive market reaction, it is a surprise to see an increase from NatWest. There is a usually a lag between changes in the market and rate changes, so provided the positive outlook for the market continues I would expect these rate increases to be temporary.
Copy

Akhil Mair
Director at Our Mortgage Broker
It's not surprising news given the current state of the world economy and political unrest, but at least NatWest is now providing 24 hours' notice before making changes to its rates. It's a step towards transparency in the banking sector, albeit small.
Copy

Peter Stamford
Mortgage Expert at Stamford Home Finance
NatWest: that's not how you start a week. Although it is preferable to last thing on a Friday like we get most weeks from other lenders.
Copy

Gareth Davies
Director at South Coast Mortgage Services
Existing customers are getting hit regardless of the fact markets have improved in the past few days, and many are anticipating that to continue. You can't blame service levels on this one either as NatWest's PT process is autonomous. Strange one to start the week.