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NatWest cuts mortgage rates, as "good news breeds good news"

ended 20. September 2023

Following this morning's positive inflation data, NatWest has just announced a range of mortgage rate reductions, which brokers have welcomed across the board. (see bottom for screengrabs of rate cuts).

Richard Campo, founder of London-based Rose Capital Partners, said: “With the lower than expected inflation figures, falling money markets and now even a question mark over whether the Bank of England will raise rates tomorrow, it is no surprise that major lenders are cutting rates. NatWest are just the first of many that will be doing this in the coming weeks.”

Steven Hargreaves, adviser at Leeds-based The Mortgage Co, was also upbeat: “This is the third large lender this week to reduce their fixed rates, suggesting the rate war is now truly underway. I would expect several other lenders to look to reduce their offerings in the next week or so, meaning mortgages are becoming cheaper, which is fantastic news for all. Another positive step for the fragile housing market.”

His views were shared by Gary Boakes, director of Salisbury-based mortgage broker, Verve Financial: “Good news breeds good news. With the promising inflation print on Wednesday, and with some big lenders making moves to lower rates earlier this week, it is no surprise that we are now seeing the likes of NatWest follow suit. I fully expect other lenders to continue this good news trend over the next few days regardless of any potential increase in the base rate.”

Meanwhile, Lewis Shaw, founder of Mansfield-based Shaw Financial Services, suggested lenders are fighting for market share due to reduced transaction volumes: “With swathes of data showing house prices falling, mortgage demand shrinking and the economy contracting, lenders are now falling over themselves to shave off their margins to keep the machine turning and pick up business. I'd expect more of this in the coming weeks and not a moment too soon. For many lenders, the borrower cupboard is feeling bare."

Much the same point was made by Charles Breen, director of Wellingborough-based mortgage broker, Montgomery Financial: “In a bid to recover lost ground in 2023, high street lenders are making concerted efforts to grow market share by rate reductions, which is the total opposite to their motives 12 months ago when they were trying to manage mortgage volumes.”

But Justin Moy, founder at Chelmsford-based mortgage broker, EHF Mortgages, said the lender was simply falling into line with the competition and questioned whether the ongoing rate cuts will come too late for the property market: “NatWest goes south with its rates, introducing a number of reductions across its full range. This repricing brings them closer to the rest of the high street lenders and is the first major move from a lender after Wednesday's inflation data. We are definitely moving in the right direction, but whether it is quick enough to save the property market we will have to wait and see."

Ben Tadd of Lucra Mortgages concluded simply: "Further positive news for mortgage borrowers as fixed mortgage rates continue to fall for the 8th consecutive week."

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Steven Hargreaves
Mortgage and Protection Adviser at The Mortgage Co
This is the third large lender this week to reduce their fixed rates, suggesting the rate war is now truly underway. I would expect several other lenders to look to reduce their offerings in the next week or so, meaning mortgages are becoming cheaper, which is fantastic news for all. Another positive step for the fragile housing market.
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Justin Moy
Managing Director at EHF Mortgages
NatWest goes south with its rates introducing a number of reductions across its full range. This repricing brings them closer to the rest of the high street lenders and is the first major move from a lender after Wednesday's inflation data. We are definitely moving in the right direction, but whether it is quick enough to save the property market we will have to wait and see.
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Darryl Dhoffer
Adviser at The Mortgage Expert
It's great to see another lender drawing their rates down in line with the rest of the market. The new business 2-year tracker rate at 60% LTV with a reduction of 40bps looks strong, so they may already be pricing in for a Base Rate rise tomorrow.
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Charles Breen
Founder at Montgomery Financial
This marks another positive step forward, and with recent declines in swap rates over the past few weeks, we anticipate this trend continuing. It's likely that other high street lenders will also take a cue from this reduction and follow suit. Lenders are capitalising on the current situation by actively pursuing mortgage applications, highlighting the substantial impact these applications have on their business volumes. In a bid to recover lost ground in 2023, high street lenders are making concerted efforts to grow market share by rate reductions, which is the total opposite to their motives 12 months ago when they were trying to manage mortgage volumes. However, questions still linger regarding whether these recent interest rate reductions are sufficient to restore confidence in the mortgage market to more favourable levels.
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Lewis Shaw
Owner and Mortgage Expert at Shaw Financial Services
With swathes of data showing house prices falling, mortgage demand shrinking and the economy contracting, lenders are now falling over themselves to shave off their margins to keep the machine turning and pick up business. I'd expect more of this in the coming weeks and not a moment too soon. For many lenders, the borrower cupboard is feeling bare.
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Gary Bush
Financial Adviser at MortgageShop.com
Another High Street mortgage lender lowering their rate is exactly what UK mortgage holders need, especially those coming off of their existing fixed rate. More to come hopefully after the more positive than expected inflation figure release.
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Ben Tadd
Director at Lucra Mortgages
Further positive news for mortgage borrowers as fixed mortgage rates continue to fall for the 8th consecutive week. NatWest is the quickest of the big six lenders to comeout of the blocks, acting to slash their rates again in response to the unexpected positive inflation data released this morning. A broad range of more generous reductions in the rate margins across their product portfolio, this time around, versus more recent cuts they have made. Certainly a further step in the right direction for prospective buyers and existing mortgage borrowers alike.
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Richard Campo
Founder at Rose Capital Partners
With the lower than expected inflation figures, falling money markets, and now even a question mark over whether the Bank of England will raise rates tomorrow, it is no surprise that major lenders are cutting rates. NatWest are just the first of many that will be doing this in the coming weeks. This period conjures images of that iconic scene in Braveheart when Mel Gibson tells his troops to hooooold! Much is the advice we have to give to our clients, as if you sign up for a fixed rate now, it may well be redundant when you come to complete your purchase or remortgage. Either going on a floating/variable rate or switching to a better deal come completion will be par for the course until this cycle settles down, which may take quite some time to happen if this sparks a rate war with lenders.
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Gary Boakes
Director at Verve Financial
Good news breeds good news. With the promising inflation print on Wednesday, and with some big lenders making moves to lower rates earlier this week, it is not a surprise that we are now seeing the likes of NatWest follow suit. I fully expect other lenders to continue this good news trend over the next few days regardless of any potential increase in the base rate.