The changes include rate reductions across its Mortgage Guarantee Scheme and green mortgage products with cuts of up to 0.69 per cent for remortgage customers and 0.52 per cent for existing customers.
Shared equity cuts
In its shared equity range, Natwest cut rates across the 60 to 75 per cent loan to value (LTV) tier, with highlights including rate reductions of up to 0.17 per cent on selected two-year fixed rate products, while the Help to Buy shared equity product has received the same cut also on two-year fixes.
For new business, the core range for purchases have seen decreases of up to 0.25 per cent and 0.28 per cent on two and five-year fixed deals respectively.
Remortgage products have seen reductions of up to 0.69 per cent and 0.1 per cent on two and five-year fixed rate deals respectively.
Mortgage Guarantee Scheme products have seen cuts of up to 0.2 per cent for two-year fixes and 0.14 per cent for five-year fixes.
Green purchase and core purchase changes
The bank has also reduced rates on its green purchase range by up to 0.19 per cent and 0.11 per cent on two and five-year fixes respectively, and on its green remortgage up to 0.16 per cent and 0.01 per cent on two and five-year fixed deals respectively.
Also in its core purchase range, the lender has made rate reductions of 0.18 per cent and up to 0.20 per cent on two and five-year fixed deals.
Remortgage products also reduced by up to 0.29 per cent and 0.19 per cent on two and five-year fixed offerings deals respectively.
The shared equity product has been reduced by 0.21 per cent with a cashback increase to £400 for a 60 per cent LTV two-year fixed offering, while the Help to Buy shared equity deal has seen a reduction of 0.21 per cent and a cashback increase to £400 on a 60 per cent LTV two-year fix.
First-time-buyers rates reduced
For first-time buyers, rates have been reduced by up to 0.18 per cent and 0.14 per cent on two and five-year fixes respectively, with a range of cashback changes.
For purchases, cashback is decreasing to £0 on an 80 per cent LTV five-year fixed product.
Regarding existing customers, the switcher rate has been reduced by up to 0.52 per cent and 0.11 per cent on two and five-year fixed deals respectively, while the high value rate has seen reductions of up to 0.9 per cent for the two-year fixes and 0.9 per cent on five-year fixed deals.
Natwest increased cashback on selected products including its two-year fixed rate remortgage at 60 per cent LTV, which rose from £0 to £200. Its five-year fixed rate purchase product at 60 per cent LTV, with a fee of £995, also saw cashback increase from £0 to £250.
The largest cuts were seen across its buy-to-let range for switching customers. The fee-free five-year fixed product at 75 per cent loan to value (LTV) decreased by 0.84 per cent to 2.21 per cent.
For two-year fixed switcher deals, the fee-free 70 and 75 per cent LTV mortgages were both cut by 0.69 per cent to 2.62 per cent.
Residential borrowers opting for a product transfer will see rate reductions of up to 0.05 per cent.
For purchases, two-year fixes at 80 and 90 per cent LTV were reduced by 0.05 per cent and 0.13 per cent respectively. Five-year fixes at 80, 85 and 90 per cent received reductions of up to 0.12 per cent.
The bank also withdrew the two-year tracker purchase product at 70 and 75 per cent LTV, as well as the five-year alternative. All deals had a fee of £999, offered £250 cashback and were priced at one per cent above the base rate.
Green mortgage changes
Natwest also added products to its green mortgage range and increased cashback on some deals.
The new products included a two-year fixed purchase mortgage at 75 per cent LTV with a fee of £995 and a rate of 1.02 per cent. There is also a product at 85 per cent LTV with a rate of 1.8 per cent and a £250 cashback incentive.
The bank also introduced a five-year fixed purchase product at 60 per cent LTV and a five-year fixed remortgage at the same tier, both with a rate of 0.98 per cent.
The increased cashback was made to the five-year fixed purchase and remortgage products at 75 and 85 per cent LTV. This was raised from £250 to £350.
These changes will come in on 27 August.
In the third in a series of four videos entitled ‘Making mental health and inclusivity working practices in the mortgage advice market’, Golunska detailed a raft of policies the firm introduced during the pandemic and confirmed it will keep in place now.
“We’ve introduced SBG wellness champions who are volunteers from all parts of the business who are raising awareness of workplace challenges particularly during lockdown. One of those areas was home working, so whilst it’s been seen as really beneficial for some it’s also been really challenging for others, who haven’t got the space or ability to work without interruption at home,” said Golunska.
The SBG boss said this issue became even more key during the home schooling part of the lockdown and after asking parents and carers what they needed then offered paid leave to those in that category.
Golunska said the firm also set up a ‘Let’s Talk’ platform of events allowing people to share thoughts on inclusivity and workplace challenges with external and specialist speakers keen to educate on some of those topics.
She suggested firms make sure they signpost wellbeing on their web pages and that they regularly reach out to employees via surveys and temperature checks, making sure they include senior leaders in these efforts. The group also launched a free service for its network members provided by a professional support organisation called Care First offering a 24 hour a day helpline offering counselling, advice and referrals.
“It’s okay not to feel okay all the time,” she said.
“Particularly difficult for me was when we first went into lock down and I was separated from my children who live away from me who I see regularly normally and I wasn’t able to meet up with.”
Watch out for the fourth and final part of this series going live on Wednesday 25 August, in association with NatWest Bank.
With thanks to our panel guests:
Michele Golunska, CEO at Sesame Bankhall Group, (SBG)
Martin Reynolds, chief executive of Simplybiz Mortgages,
Alan Ferguson, senior corporate account, manager at NatWest,
Harpreet Butoy, wellbeing and inclusion champion at NatWest
The lender said that it would accept applications from self-employed borrowers who had received an SEISS grant as long as it was not in the last three months.
In an update to its criteria it added that brokers will no longer need to complete a mandatory self-employed application submission sheet and the self-employed triage team will not have to complete an affordability check.
The lender continued that it would use an average of the last two years or the most recent year’s income, whichever was lower, and look at the last three months’ business bank statements to assess its ability to sustain a declared level of income.
NatWest previously said that it would not accept applications from customers who have applied for an SEISS grant on or after 14 July 2020 but said that it would unveil a new criteria change in August.
Brokers speaking to Mortgage Solutions have also expressed dissatisfaction with the options available to self-employed borrowers over the past year.
However, lenders have started to soften their criteria, with HSBC announcing earlier this week that it would no longer ask self-employed applicants to provide bank statement from the first three months of 2020.
Santander and Bluestone Mortgages have also announced that they would not look at accounts for the 2020/21 financial year.
The changes are effective from tomorrow and include a 0.05 per cent reduction to its five-year fixed rate purchase product at 60 per cent loan to value (LTV) to 0.99 per cent.
Both its two-year fixed rates at 70 per cent LTV and 75 per cent LTV in its purchase range have gone down from 1.07 per cent to 1.03 per cent.
Its 80 per cent LTV purchase product has decreased from 1.63 per cent to 1.58 per cent, whilst its two-year fixed rate at 85 per cent LTV has been cut from 1.85 per cent to 1.81 per cent.
NatWest has also reduced its two-year fixed rate purchase product at 90 per cent LTV from 2.23 per cent to 2.13 per cent.
On the remortgage side the lender has slashed the rates for its five-year fixed rate at 60 per cent LTV from 1.04 per cent to 0.99 per cent, and its two-year fixed rate remortgage has fallen from 1.63 per cent to 1.58 per cent.
The lender is also removing some of its products in its green mortgage purchase range, including its five-year fixed rate 60 per cent LTV, which had a rate of 1.03 per cent.
It is also eliminating its two-year fixed green mortgage purchase product, which had a rate of 1.07 per cent, as well as its two-year fixed rate at 85 per cent LTV which had a rate of 1.84 per cent.
In its green remortgage range NatWest is removing its five-year fixed rate at 60 per cent LTV, with a rate of 1.03 per cent.
The bank will now use an affordability stress rate of 4.5 per cent for landlords choosing to fix for longer or remortgaging without raising any further capital.
Alongside this change, NatWest has removed its loan-to-income cap for small landlords and like-for-like applications which means the maximum loan amount will be based on the property’s rental earnings and the landlord’s tax band.
Small landlords and like-for-like remortgage borrowers will also benefit from a reduced underwriting process and no proof of income is required when the application is submitted.
Luke Christodoulides, (pictured) head of corporate accounts at NatWest Intermediary Solutions, said: “We have been working hard to simplify our buy-to-let approach and have listened to feedback from brokers and our staff on where we could improve.”
This headline reduction was made within its buy-to-let offering on its 75 per cent loan to value (LTV) five-year fixed fee-free remortgage product, which was cut to 2.01 per cent.
Other significant cuts include the two-year fixed buy-to-let remortgage at 60 per cent LTV, which was reduced from 2.77 per cent to 1.63 per cent. This product also has no fee.
There was also the 70 per cent LTV five-year fixed fee-free buy-to-let remortgage product, which has decreased by 129 bps to 1.73 per cent.
The bank has also removed the £250 cashback incentive from some of its mortgages, including two-year fixed residential purchase products at 80, 85 and 90 per cent LTV.
These products also received reductions of up to 0.22 per cent.
A five-year fixed purchase product at 90 per cent LTV also had its cashback incentive removed, meanwhile the rate on the fee-free mortgage was reduced from 3.29 per cent to 3.07 per cent.
For first-time buyers, rates for two and five-year fixes at 80 to 90 per cent LTV decreased by up to 0.19 per cent.
Changes come into effect from tomorrow.
The group’s retail banking segment “continued to pursue sustainable growth with an intelligent approach to risk,’ its H1 statement said.
“Lending growth was supported by a strong performance in mortgages, partially offset by continued UK government restrictions impacting customer spending and the continued repayment of unsecured balances,” it said.
Net interest margin (NIM) on retail banking was 2.07 per cent for H1, down by 16 basis points from 2.23 per cent in H1 2020.
However in Q2, the retail banking NIM increased by two basis points, “reflecting strong mortgage completion margin and a full quarter of savings customer rate changes,” the bank said.
“Mortgage completion margins of around 165 basis points were higher than the back book margin of 163 basis points, with application margins of around 155 basis points in the quarter decreasing to around 145 basis points in the latter part of Q2 2021, reflecting increased competition in the market,” it said.
For H1, retail banking net loans to customers increased by £5.8bn, due to continued strong mortgage growth of £6.2bn.
The retail banking segment had about 500 active mortgage payment holidays as of 30 June 2021, representing less than 0.1 per cent of the book by volume.
Housing bond issue
Across UK and RBSI retail and commercial, net lending, excluding government support schemes, was up by £4.1bn to £302.0bn – including £7.0bn of mortgage growth in H1. The net mortgage lending growth was partially offset by lower unsecured and commercial lending volumes.
The £1.9bn increase in Q2 2021 included mortgage lending growth of £3.6bn.
The lender issued a €1bn (£850m) affordable housing social bond, the first of its kind from a UK bank, during H1. Funds raised will support lending to not-for-profits and UK housing associations, and will form part of the bank’s commitment to provide £3bn to the affordable housing sector by the end of 2022.
