Although the headline interest rate is attractive, borrowers must consider the significant fee of £1,495, applicable only to online applications.
Mortgage brokers predict that more lenders will follow NatWest’s lead and reduce rates, benefiting potential homebuyers. David Hollingworth, of L&C Mortgages, told inews.co.uk. “I’d fully expect further improvements and more lenders looking to break through to sub-4% five-year rates. It continues the edging down in rates and there’s likely to be more looking to join in. The cut to base rate last week came sooner than many had expected and that should strengthen anticipation that another cut comes before the end of the year. The Bank of England has been keen to downplay that cuts will come thick and fast, but this should help to reduce costs for lenders.”
In addition to NatWest’s offer, other lenders are also reducing their rates. Earlier today, Mpowered decreased its fixed rate by up to 0.37 percentage points, marking its second rate cut within a week. This trend follows a series of rate reductions from various lenders in recent weeks.
Fixed mortgage rates typically decline as swap rates, which are based on long-term forecasts for the Bank of England’s base rate, fall. Last week, those with tracker and variable mortgages also saw reductions following the Bank of England’s rate cut.
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