NatWest has reduced its mortgage rates this week, moving to the front of the market for borrowers seeking competitive fixed deals ahead of the Chancellor’s spring statement on March 3.
The bank is now offering a two-year fixed mortgage at 3.62 per cent, down from 3.70 per cent the previous week, with a £1,495 product fee attached.
Its five-year fixed deal has also been trimmed to 3.84 per cent from 3.85 per cent.
Both products are available only to borrowers with a deposit of at least 40 per cent.
By contrast, other major high street lenders have kept their rates unchanged as markets await fiscal announcements from Chancellor Rachel Reeves.
HSBC maintained its two-year fixed rate at 3.76 per cent with a £999 booking fee, while its five-year deal remains at 3.88 per cent.
Barclays held its two-year fixed at 3.70 per cent and its five-year option at four per cent.
Nationwide Building Society kept its first-time buyer two-year deal at 3.67 per cent and its five-year rate at 4.16 per cent, both requiring a 40 per cent deposit and carrying a £999 fee.
Halifax, the UK’s largest mortgage lender, left its two-year fix at 3.91 per cent and its five-year product at 4.02 per cent.
NatWest has reduced its mortgage rates this week
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GETTYThe broad decision to hold rates steady reflects a cautious approach across the sector before the spring statement.
Market participants expect limited housing policy changes but are waiting for greater clarity on wider fiscal measures.
The Bank of England held its base rate at 3.75 per cent this month, in line with expectations.
Recent data has shown easing inflationary pressure.
Figures from the Office for National Statistics (ONS) recorded consumer prices rising by three per cent in the 12 months to January, down from 3.4 per cent in December.
Rachel Reeves will give her spring statement on Tuesday next week
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PAThat represents the lowest Consumer Price Index (CPI) reading since March last year.
Financial markets are pricing in a quarter-point reduction in the base rate to 3.5 per cent when policymakers meet on March 19.
A cut of that scale would reduce payments for more than one million households on tracker mortgages whose rates move in line with the Bank’s benchmark.
Despite NatWest’s reductions, average mortgage rates across the market increased this week.
The Bank of England is expected to cut the base rate in March
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PAAccording to Uswitch data, the average two-year fixed rate rose to 4.75 per cent from 4.53 per cent the previous week, while the average five-year fix increased to 4.99 per cent from 4.94 per cent.
Those averages apply to mortgages at 75 per cent loan-to-value, requiring buyers to provide a 25 per cent deposit.
Accessing NatWest’s lowest rates requires significantly higher upfront capital.
With the average UK property valued at £297,755 in December, a buyer would need close to £120,000 saved to meet the 40 per cent deposit requirement.
Borrowers have faced elevated repayment costs in recent years as higher base rates have fed through into mortgage pricing across the banking system.