NatWest has lowered selected fixed mortgage rates for both new and existing customers, bucking a broader trend where some lenders have increased borrowing costs. The move comes amid rising swap rates and global economic uncertainty, including inflation concerns sparked by renewed conflict in the Middle East.
The rate cuts from NatWest include two- and five-year fixed remortgage deals, now available at 3.92% and 3.95% respectively, with a 40% deposit requirement and a £1,495 fee. Product transfer rates for existing borrowers nearing the end of fixed-rate terms have also been reduced.
While NatWest and a handful of other lenders such as Halifax, BM Solutions, TSB, and Principality Building Society have made moderate cuts across selected fixed products, others have opted to raise rates. Barclays, HSBC, and Skipton Building Society have increased certain fixed-rate offerings, citing rising swap rates and service management concerns.
The Bank of England is expected to maintain the Bank Rate at 4.25% in its next decision on June 19. Geopolitical tensions and higher oil prices are viewed as potential inflationary pressures that may deter immediate monetary easing.
New data from the Bank of England shows that lending to first-time buyers rose to 29.6% of the market in Q1 2025, the highest share since 2007. Mortgages with 90% loan-to-value ratios also reached a 17-year high. In response, mutual lenders including Nationwide, Skipton, and Yorkshire building societies have urged regulators to loosen current restrictions on high loan-to-income lending, allowing them to better serve first-time buyers.
Despite the volatility, analysts expect a period of relative stability in fixed mortgage rates in the near term as lenders adjust to market dynamics and regulatory constraints.