Brokers divided on NatWest rate cuts

NatWest has just announced a series of rate changes, following on from HSBC's new rates that went live earlier today (see bottom for the full list of changes). Brokers were divided on the news.

Justin Moy, founder at Chelmsford-based mortgage broker, EHF Mortgages, was upbeat: "More rate cuts on the High Street, and this time NatWest has joined the party with some significant reductions across its residential and buy-to-let ranges. Existing borrowers will also feel the benefit, which is important. For those looking for a new deal, take these options while you can as rates can quickly increase if we have some difficult UK inflation or wider economic data to deal with in October." 

Lewis Shaw, founder of Mansfield-based Shaw Financial Services, also welcomed the news: “Lenders are dropping their rates at breakneck speed in an attempt to stimulate activity and boost their market share. With Nationwide, HSBC, Santander and Virgin all reducing this week, the question on everyone's lips is, when do Halifax join the race? Yes, rates are still higher than brokers and clients would prefer but each reduction is a step in the right direction.”

But Elliott Culley, director at Hayling Island-based Switch Mortgage Finance, said the current round of rate cuts are a little too cautious: “While it's good to see lenders all reducing rates, I am still waiting for a lender to break cover with their new rates and provide something to make advisers really sit up and take notice. It all feels a bit too cautious right now.”

Meanwhile, Riz Malik, director of Southend-on-Sea-based independent mortgage broker, R3 Mortgages, was bittersweet. “NatWest's reductions are welcome as lenders continue to reprice fixed rates downwards. Additionally, it would be commendable if there was a commitment from the lender to ensure that better rates are not provided to those who refrain from seeking advice.”

Craig Fish, managing director at London-based mortgage broker Lodestone, echoed Malik's views but added he would like to see more competitive rates for those seeking to remortgage: “It's interesting that NatWest has now seen the light, and offered their cheaper products to brokers, too. I expect we will see much more of this competition over the coming days. What is disappointing, though, is that none of these lenders are offering sub-5 % deals for remortgage clients. This is where we really need to see some reductions because it's going to take much bigger rate reductions to reignite the purchase market.”

Steven Hargreaves, mortgage adviser at Leeds-based The Mortgage Co, concluded: “This is more evidence of the interest rate war that is starting to rage. We welcome reductions in rates and hope the current level of competition means cheaper mortgages for all. For NatWest, it is the second round of rate reductions in just 7 days, showing they are keen to secure the business going into the fourth quarter of the year.”

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New Business Rate Changes:
• Purchase: Rate reduction of up to 21ps and 22bps on selected 2 and 5 year deals.
• Remortgage: Rate reduction of up to 17ps and 24bps on selected 2 and 5 year deals.
• First time buyer: Rate reduction of up to 25ps and 22bps on selected 2 and 5 year deals.
• Shared equity - purchase: Rate reduction of up to 22ps and 10bps on selected 2 and 5 year deals.
• Help to Buy shared equity - remortgage: Rate reduction of up to 15ps and 9bps on selected 2 and 5 year deals.
• Green - purchase: Rate reduction of up to 20bps on selected 2 and 5 year deals.
• Green – remortgage: Rate reduction of up to 17ps and 16bps on selected 2 and 5 year deals.

New Business New Products: 
• Purchase: 10 new products covering 2 and 5 year deals from 60% LTV to 90% LTV with £1,495 fee.
• Remortgage: 20 new products covering 2 and 5 year deals from 60% LTV to 90% LTV with £1,495 fee, and £250 cashback on relevant products.

Existing Customer Rate Changes: 
• Switcher: Rate reduction of up to 29ps and 24bps on selected 2 and 5 year deals.
• Buy to Let switcher: Rate reduction of up to 20bs and 16bps on selected 2 and 5 year deals.