The lender has followed the likes of Santander, Woolwich and TSB in accepting foreign currency loans, while Lloyds Banking Group, Skipton and Nationwide building societies have all ruled out doing so.
As detailed in the directive lenders will have to give customers a risk warning when the difference between the foreign currency and sterling fluctuates by 20%. For interest-only mortgages only sterling-based repayment strategies will be accepted, although the lender will still accept foreign currency income.
NatWest said switching to ESIS documentation, known as Mortgage Illustration in the UK, will see the inclusion of additional disclosures to ensure customers understand the mortgage products they are taking out and detailing the risks of future interest rate rises.
The Mortgage Credit Directive which will officially come into play on 21 March 2016.
Sarah Taylor, service development manage at, NatWest Intermediary Solutions, said: “The MCD is a significant piece of legislation for the industry but one that we are well-placed to deal with.
“We believe it is sensible to adopt the requirements in mid-January well ahead of the deadline.
“By switching directly to the new Mortgage Illustration, it will mean making only one change to our systems which has to be good news for intermediaries.”
