The group has announced two products, a two-year fixed rate product at 4.99% and a five-year fixed rate mortgage at 5.49%. Both are available fee-free up to 95% LTV and will be offered on all properties up to £600,000.
RBS will initially restrict products to direct channels only, although Mortgage Solutions understands the lender is looking to launch its range to the intermediary channel before the end of the year when systems changes allow.
The lender will extend opening hours at its 740 NatWest and RBS branches for the next two weeks to cope with expected demand. It said that it expects to help 25,500 first-time and next time buyers using the scheme over three years.
There are currently 44 95% LTV products available according to Moneyfacts, but this figure includes guarantor and regionally-restricted mortgages.
Other similar products available include a Yorkshire Bank three-year fix at 5.49% while Leeds Building Society currently offers a five-year 95% LTV product at 5.39%, although this product comes with a £999 fee.
London & Country’s David Hollingworth said the RBS products were competitive priced: “These rates pitch in below and around where other lenders have priced mortgages at.
“Getting below 5% is a good barrier to break. The two-year looks very good, compared to something like Newcastle Building Society’s 5.95% mortgage you’re almost knocking a percentage point off the rate.
“It’s significant that NatWest is coming in and improving rates on offer. We needed Help to Buy to be bringing more choice to the market and NatWest has been priced competitively for the first part of the scheme too.”
Ray Boulger, senior technical manager at John Charcol, told Mortgage Solutions: “I think these are pretty good rates, I was expecting low 5%. The two-year product looks a good bet, especially as the revert-to rate at RBS is 4%, assuming the SVR doesn’t go up in that time.
“But it does beg the question whether an in-house adviser might not see things in the same way as an independent adviser, from the banks point of view it might be better to lock people in for the bank’s safety.”
Lloyd Cochrane, head of mortgages at RBS and NatWest, said: “We’ve had lots of interest in Help to Buy mortgage guarantee already, it’s clear that for many of our customers this scheme will make the difference and enable them to buy that next property.
“I bought my first home with a 95% mortgage, so I understand how hard it can be to save for a large deposit. This scheme will make that challenge to pull together a deposit a little bit easier. From today customers can visit any of our 2,000 branches or call us to find out how we can help them through the scheme.”
Halifax has also announced its first product while Aldermore, HSBC and Virgin Money and Aldermore have also confirmed plans to launch Help to Buy mortgages in the coming months.
For all today’s Help to Buy coverage, click HERE.