Borrowers are urged to act quickly as further rises are expected to follow in the coming days
NatWest has increased its mortgage rates by up to 27 basis points, making it the latest major lender to announce a rise amid renewed pressure on funding costs.
The bank's lowest standard residential purchase rate now stands at 4.3% on a two-year fixed product at 60% loan to value (LTV), with a £995 fee. Its lowest residential remortgage rate is 4.43%, available on a two-year green remortgage at 60% LTV, also with a £995 fee.
First-time buyer rates start at 4.65% for a two-year fix at 85% LTV with a £995 fee. At the higher end of the LTV range, NatWest's 95% LTV products are priced from 5.3% on a two-year fix and 5.16% on a five-year fix, both fee-free.
Barclays, Nationwide, Coventry Building Society, and Virgin Money had each announced mortgage rate increases earlier this week.
David Hollingworth (pictured right), associate director at L&C Mortgages, said that while rate cuts had generally driven the market in a positive direction in recent weeks, borrowers hoping for an ongoing downward trend would need to reconsider, with a growing number of lenders announcing imminent increases.
“The resumption of hostility in the Middle East has caused further uncertainty in financial markets, as the threat of higher interest rates returns," Hollingworth said. "That’s affecting lenders’ funding costs and has already resulted in several major lenders announcing that they have increased fixed rates or are about to."
Hollingworth warned that multiple lenders moving in quick succession typically signals others will follow, and urged borrowers who had been waiting for further reductions to act promptly to avoid missing some of the lowest available rates.
“Although many increases have so far been slight, others are chunkier," he noted. "For example, Nationwide’s leading two-year fix for purchases at 4.24% has now lifted to 4.59%, an increase of 0.35% equating to an uplift in monthly payments of almost £40 per month or £480 per annum.
“Things can change quickly but securing a rate now could avoid being hit with further rises while still allowing a further review of rates before completion if the situation eases back again.”
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
