BTL rates get significant increases
NatWest has announced that it is increasing rates on new and existing customer product ranges, effective today, June 13, with significant buy-to-let rate increases of up to 1.57%.
For its new business range, the lender has hiked rates by 20 basis points (bps) on selected two- and five-year deals on purchase, remortgage, first-time buyer, Help to Buy shared equity for remortgage, green purchase, and green remortgage products. The shared equity product for purchase has had its rates increased by 75bps.
The largest increases were made on the lender’s buy-to-let products, with rate hikes of up to 157bps on purchase and 124bps on remortgage. Green BTLs also had their rates increased by up to 138bps on purchase and 110bps on remortgage.
For its existing customer range, the UK’s second largest mortgage lender raised its switcher product rate by up to 35bps and 30bps on selected two- and five-year deals. The switcher tracker had its rates upped by up to 55bps on selected two-year deals.
The BTL switcher product for existing customers had relatively moderate rate increases at 42bps and 26bps on selected two- and five-year deals.
What’s with NatWest’s buy-to-let rates?
“The considerable rise in mortgage rates on buy-to-let properties underlines the flux in the market at present and introduces yet more hardship and pain for numerous landlords,” Riz Malik, founder and director at R3 Mortgages, commented. “With each passing day, the financial calculations seem to make less sense. This a significant blow for the entire UK buy-to-let market.”
Anil Mistry, director and mortgage broker at RNR Mortgage Solutions, noted that it appeared that NatWest is temporarily scaling back its buy-to-let lending activities and redirecting its focus towards residential applications.
“It looks as if this is a strategic decision that aims to ensure that service levels remain unaffected during this period,” he said.
Luke Thompson, director at PAB Wealth Management, agreed with Mistry, saying that it seemed “pretty obvious that NatWest don’t want to be in the buy-to-let mortgage arena at this point in time.”
“My assumption is that they want to see where swap rates will go in the coming weeks, and once they have a bit more of an idea on that front, they may start to price buy-to-let products more competitively again,” he added.
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