- NatWest has reduced its fixed mortgage rates for the second time this month
NatWest and HSBC are the latest banks to lower mortgage rates, with the cheapest fixed-rate deals now closing in on 4 per cent.
NatWest has cut some of its fixed mortgage rates for the second time this month, and the bank is now offering the lowest five-year fix on the market.
Home buyers purchasing with a 40 per cent deposit or more can now secure a 4.07 per cent rate with NatWest, though the deal comes with a £1,495 fee.
On a 25-year repayment term, someone buying with a £200,000 mortgage could expect to pay £1,064 for the initial five-year period.
Homeowners looking to remortgage with 40 per cent equity in their home can secure a 4.08 per cent rate with NatWest. Again, this comes with a £1,495 fee.
Mike Staton, director at Mansfield-based Staton Mortgages, thinks NatWest is trying to tempt customers to fix for longer with the view that interest rates will be much lower come this time next year.
Domino effect: NatWest and HSBC announced the changes off the back of mortgage rate reductions by Halifax, Santander and Barclays
Speaking to the news agency, Newspage, he said: ‘Welcome to the mortgage domino rally. NatWest’s reduction of all five-year fixed rates is an attempt to lure clients into locking into long-term deals before rates start to drop.
‘I strongly believe the base rate will be around the 3 per cent mark this time next year so this move will safeguard NatWest’s profit margin for the next five years.’
David Stirling, independent financial advisor at Belfast-based Mint Mortgages and Protection added:
‘To cap off a great week of rate cuts for borrowers, NatWest go again with their second sweep of reductions in a fortnight across their five-year products.
‘Borrowers should be rubbing their hands cheerily, as this follows on the back of Halifax, Santander and Barclays amongst others all reducing rates last week.’
HSBC has also announced a number of rate changes, the details of which will be announced in full on 17 December.
But while the bank says it is reducing rates for those buying with bigger deposits or those remortgaging with high levels of equity, it is increasing rates for those with less to put down.
David Stirling added: ‘HSBC are the first lender to tinker with their rates on Monday in what should prove to be a very active week as banks actively compete for applications to kickstart their targets for next year.
‘HSBC is cherry-picking the borrowers they want, as they decrease rates for those with a bigger deposit and increase rates at higher loan-to-values.’