NatWest mortgage rate at 3.77% released
In a very interesting move this week, one of the UK’s big six mortgage lenders has narrowly undercut one of their major competitors to offer the current lowest mortgage rate on the mainstream market. A new NatWest mortgage rate of 3.77% has been released this week, just slightly dropping below Nationwide’s lowest residential mortgage rate at 3.78%. This is a very interesting and quite brazen move from NatWest, clearly trying to show that they want to compete with other lenders, but not quite committing to dropping rates significantly. In this article, I will explore the new rates released by NatWest this week, and offer my predictions as a mortgage expert, on the UK mortgage market trajectory.
New NatWest Mortgage Rate Of 3.77% Released
At the end of August 2024, we all started (almost literally) jumping for joy when many mortgage lenders started to drop their rates below the sticky 4% that has stayed with us for well over a year now. Many lenders hovered around the 4% or 4.5% as their lowest available mortgage rates, but in August we saw the likes of Nationwide, Virgin, HSBC, and Barclays all drop their rates to below 4%. Whereas some lenders literally only dropped their rates a couple of points below 4%, some lenders like HSBC and Nationwide dropped their rates by as much as 0.22%.
Clearly not wanting to be seen as an out of touch lender who can’t compete, NatWest have sensationally released a product with a rate just 0.01% below Nationwide’s product. Although not a huge drop, every little helps in a tough mortgage market! For buyers who have a deposit of 40% or more (60% Loan-To-Value) and are looking to take out a 5-year fixed mortgage, a NatWest mortgage rate of 3.77% will be available, subject to meeting all regular mortgage criteria. The product is only available for home purchases, and does however come with a £1,495 fee, which is not so competitive!
NatWest Mortgage Rate Example
Let’s quickly look at a scenario where this product could work:
Purchase price: £300,000
Deposit: £120,000
Mortgage: £180,000
Term: 30 years
Standard rate of 4.5%: £912 p/m
New NatWest rate of 3.77%: £836 p/m
Amount saved per month: £76
Speak To A Mortgage Advisor
From these recent rate wars taking place amongst the top six mortgage lenders in the UK, it is clear to me that this will only continue. Lenders are clearly hungry to lend and don’t want to be seen as not being able to compete, or perhaps being an undesirable lender due to their high rates. I had previously predicted that we would see big rate drops, but this move from NatWest has signalled to me that lenders may just keep on slightly chipping away at their product rates, slightly undercutting each other to try and gain the upper hand. But am I against this? Not at all. Of course I would like to see bigger rate drops for our clients, but any reduction is good in my opinion. No matter how small.
At Oportfolio we are whole of market brokers, so please feel free to give our team a call today for a free initial mortgage consultation. We are here to help.
