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Swap rate rise triggers NatWest product changes

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  • 05/10/2017
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Swap rate rise triggers NatWest product changes
NatWest is increasing rates or cutting cash back amounts on 45 residential mortgages tomorrow by up to 90 basis points.

While most loans affected are increasing by around 10 basis points, deals in its five-year fixed rate remortgage range are soaring by between 40 and 90 basis points.

It is the latest of several lenders to raise rates in the last week, signalling a hardening in the mortgage rate market.

The lender noted that swap rates had risen on the expectation of a Bank of England Base Rate rise, meaning the cost of borrowing for banks had increased.

NatWest’s changes affect two-year and five-year fixed rate deals for purchase and remortgage on its core range. Cash back amounts are also being cut to £250 from £500 or £350 on several of these products.

The lender is cutting the rate on one five-year buy-to-let product by 0.09%.

 

Prevailing market conditions

NatWest head of sales Mark Bullard (pictured) said: “Having reviewed our product portfolio in line with the prevailing market conditions, we are introducing changes to our mortgage rates that include a number of rate increases on our residential deals and a rate reduction for a buy-to-let purchase mortgage.

“Swap rates have risen recently, on the expectation that interest rates will begin to rise in the near future, which has increased the cost of funding.

“We continue to maintain a strong appetite for buy-to-let business and have reduced rates on a number of our broker-exclusive deals. The changes we introduced last week to our buy-to-let proposition and the further enhancements we have planned for later this year, underline this commitment,” he added.

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