There are now two property value bands, compared to 24 before.
Free standard valuations will be offered to applicants where the purchase price or property value is below £2m. This will only apply to the first standard valuation.
For purchase prices or property values up to £3m, applicants will pay £177. NatWest said this was down from the previous average cost of £352 for applications where property values were up to £3m.
Properties with a value or purchase prices over £3m have a valuation fee of £1,455.
Costs include a £75 administrative fee and would have been applied to new applications from 12 June.
Home buyer and structural reports remain unaffected, with fees starting from £450.
From Wednesday 2 June, the bank, which had previously only offered five per cent deposit deals through its branch and telephone network, will open up its books to mortgage brokers.
A 3.65 per cent two-year fixed rate and a 3.89 per cent deal fixed for five years are available. Both have zero arrangement fees.
The deals are cheaper than those offered through its direct-to-consumer channel which are currently priced at 3.9 per cent and 4.04 per cent for the two and five-year fixed rates respectively, according to Moneyfacts.
Alongside the 95 per cent LTV broker launch the bank will cut rates of up to 18 basis points on purchase deals and 19 basis points on remortgage rates.
Effective from tomorrow, the two-year fixed purchase deal at 90 per cent loan to value (LTV) will be reduced by 0.2 per cent to 3.6 per cent. This product has a £995 fee and £250 cashback.
Five-year fixed purchase products up to 85 per cent LTV have seen rate cuts by as much as six basis points (bps).
Rates now vary from 1.53 per cent for a 60 per cent LTV deal and 2.99 per cent for the fee-free option at 85 per cent LTV.
Meanwhile, the two-year fixed purchase product at 60 per cent LTV has been reduced to 1.08 per cent from 1.14 per cent and its £250 cashback has been withdrawn. The 75 per cent LTV purchase mortgage has also been cut by seven bps to 1.32 per cent, and its £200 cashback has been pulled.
As for the 85 per cent LTV two-year fixed purchase product, its rate has been cut to 1.23 per cent from 1.27 per cent. It now offers £200 cashback.
For first-time buyers, the two-year fixed at 85 per cent LTV has had a rate cut of three bps to 2.59 per cent. The £995 fee paying product had its cashback increased from £500 to £1,000.
Two-year fixed green mortgages had rates reduced by up to 12 bps, while five-year fixes have been cut by as much as six bps.
Brokers will be able to produce mortgage illustrations and submit applications online for existing deals up to 10:30pm today.
Last week, the tax department said there could be delays of more than a month to issue a tax year overview (TYO) for the self-employed if they had taken out a Self-Employment Income Support Scheme (SEISS) grant.
This is opposed to the usual 24-72 hour turnaround to receive the TYO. The department put this down to incorrect returns being filed by taxpayers.
Nationwide said while it sympathised with borrowers facing hold ups receiving their documentation, it added: “this is an essential document that we require as part of the application process and mortgage offers are not issued until all of our requirements are met.”
The building society said the presence of a Covid-related loan or grant would not be a reason to decline an application but said if a borrower was reliant on such income it would need to consider their long-term affordability in addition to the TYO.
Nationwide’s spokesperson continued: “In some cases, to support a lending decision we may request additional information such as accounts and business bank statements.”
Virgin Money said it was accepting self-employed borrowers who had taken an SEISS grant and said the majority were using previous year’s accounts for affordability.
Although it had seen a few borrowers insist on using their 2020/21 accounts, there were no issues as they had always had their TYO to hand, it said.
A spokesperson for Virgin Money added: “If there was an issue with a self-employed application, we’d work with the customer to understand what alternative income proofs were available and how we could help.”
HSBC appeared to be taking a similar approach, as it said: “We will review each case that is affected by this issue individually.”
NatWest said because it was not currently lending to those who had applied for a grant after 14 July, it was not seeing any hindrances with documentation.
However, a spokesperson for the bank said: “As a responsible lender this is part of the bank’s affordability criteria, however we are currently reviewing our policies for self-employed customers who have applied for a SEISS grant and looking to update our policies and affordability calculators in the near future to better support these customers.
“We do continue to consider other forms of income to support an application for self-employed customers, i.e. rental, employed income or other businesses.”
Barclays confirmed it was accepting mortgage applications for those who had taken a SEISS grant but did not respond to queries over how it would handle any related delays, should they occur.
Santander reaffirmed it would discount self-employed figures from 2020/21 and consider accounts from 2018/19 and 2019/20 instead in cases where borrowers had suffered a drop in income or received a grant under the SEISS.
It did not say what it would do if borrowers chose to use figures from 2020/21.
The bank, which joins Santander and Nationwide, is fully integrated with the platform using APIs. Website users can find out if they will qualify for the mortgage amount before they proceed to a full online application.
The next phase of Moneysupermarket’s website development will be to expand into purchase and buy-to-let mortgage searches.
NatWest’s head of digital distribution Dave Harries said the bank would be opening up its product range when the platform expansion was complete.
Mark Gracey, corporate development director at Moneysupermarket, said: “Direct digital integrations with three of the top six lenders on MoneySuperMarket’s mortgage platform simplifies the process and reduces the effort of comparing mortgages. We are pleased to be able to partner with the experienced team at Podium to deliver these significant enhancements for our customers.”
The bank was able to release £102m of its bad loan provisions which helped to drive up NatWest’s year-on-year profits from £288m in March 2020 to £620m at the end of its quarter one trading period.
In 2020, the bank set aside an £802m impaired loan fund but after fewer borrowers defaulted on their loans during the pandemic than expected, the bank took back some of its provision.
Chief executive Alison Rose (pictured) said: “Defaults remain low as a result of the UK Government support schemes and there are reasons for optimism with the vaccine programmes progressing at pace and restrictions being eased. However, there is continuing uncertainty for our economy and for many of our customers as a result of COVID-19.”
NatWest used some of its spare capital to buy back 591 million shares from the government. It cancelled 391 million of the purchased shares and has retained the remaining 200 million shares. The transaction reduced the government’s stake in the bank to 59.8 per cent.
The share price fell 2.2 per cent in early trading.
At the end of the Q1 trading period, around 12,000 borrowers were still on mortgage payment holidays representing one per cent of the bank’s mortgage book by volume.
NatWest’s net interest margin increased by three basis points compared with Q4 2020 reflecting mortgage margin improvement.
Equity analyst at Hargreaves Lansdown Nicholas Hyett said: “NatWest is telling a bit of a different story to the rest of the UK banking sector.
“While many banks are struggling against low interest rates, NatWest’s net interest income is doing better than expected, despite customers paying down higher interest credit cards.
“That’s thanks to very strong mortgage lending, where the bank added some £9.6bn to the loan book.
“NatWest is awash with capital, and unlike other UK banks is already making use of it. £1.2bn of government shares have been bought back this quarter, and while that still leaves the government with a majority share it hopefully starts the clock on bringing one of the last legacies of the financial crisis to a close.”
The product to see the largest cut was the fee-free five-year fix at 60 per cent loan to value (LTV) which went down to 1.59 per cent from 1.93 per cent.
Other significant reductions include its two-year fixed purchase products at 70 and 75 per cent LTV which were both cut from 2.18 per cent to 1.85 per cent.
The 60 per cent LTV alternative has been reduced to 1.52 per cent from 1.78 per cent.
Two-year fixed remortgages at 60 per cent LTV for both standard and high value borrowers have been cut by five bps.
Its five-year fixed purchase mortgages have had £250 cashback added as well as rate cuts.
These include the 60 per cent LTV product with a £995 fee which saw a reduction of 0.01 per cent to 1.27 per cent. The product at 90 per cent LTV, also with a £995 fee saw the same reduction to 3.38 per cent.
The fee-free 70 and 75 per cent LTV five-year fixes both received rate cuts of 24 bps to 1.95 per cent.
NatWest has also increased rates for switching customers by as much as 25 bps.
The two-year fixed product switch at 90 per cent LTV has gone up to 3.29 per cent, from 3.18 per cent, while the £995 fee-paying option has increased to 3.09 per cent from 2.84 per cent.
TSB product changes
TSB has also made changes to its mortgage range.
This includes a 0.05 per cent reduction on rates across two-year fixed remortgages up to 75 per cent LTV with a £1,495 fee.
Elsewhere, the bank has withdrawn its two and five-year fixed purchase and remortgage products with a £1,995 fee and five years’ early repayment charges.
Its fee-free, £995 and £1,495 fee-paying equivalent products remain.
Only a soft footprint will be produced and there will be no limits on how many AIPs can be submitted for a client.
The AIP will be guaranteed for 30 days as long as no changes are made. If any reassessment is required, the original criteria in the AIP will apply for the duration of the application.
NatWest said it has also made changes to its back end processes to simplify applications. It has updated its decision and warning messages to make them clearer to brokers and streamlined operations to reduce the number of requests for customer identification.
The bank also said that in the future, it would display packaging requirements tailored to a client’s circumstances.
AIPs completed before 26 April, when the changes come in, must be progressed to a full mortgage application by 7 May. AIPs which are not progressed will expire after this date.
Documentation for these AIPs will need to be submitted within 15 working days.
All new AIPs started from today will be valid for 30 days.
