Mortgage rate cuts: NatWest launches best deals for new customers from tomorrow

Banks and building societies have announced a fresh round of mortgage rate cuts, including a new Best Buy for first-time buyers.

NatWest is set to cut many of its rates from tomorrow and will offer a higher-than-market rate of 4.68 per cent fixed for five years to new customers buying a home with a 10 per cent deposit.

It has a fee of £995 and is substantially lower than the competition. The next best rate will be Virgin Money’s 4.76 per cent fee of £909.

Someone buying a £250,000 home and paying off the mortgage over 30 years would pay £1,164 a month under NatWest’s deal, compared with £1,175 under Virgin.

NatWest is also launching a two-year fixed mortgage for home buyers with a 25% deposit, at 4.44% with a fee of £1,495. This is slightly lower than Barclays’ 4.45%, although the fee is lower at £899.

For new customers refinancing their mortgage with 40 per cent equity or more, it will offer a two-year fixed rate best buy of 4.34 per cent with a fee of £1,495, or 3.9 per cent with a fee of £995.

The best current option is Barclays’ 4.4 per cent rate, with a fee of £948.

NatWest is cutting rates by up to 0.20 percentage points on a range of deals for new customers of the bank, including those buying homes and refinancing their mortgages with their current lender.

Its lowest interest rate currently on offer is a five-year fix for those buying with a 40 per cent deposit, at 3.89 per cent on a five-year fixed deal.

While this is one of the cheapest deals on the market, Barclays has a cheaper deal of 3.84 per cent with a lower fee of £899.

The NatWest rate has a fee of £1,495 and the equivalent fee-free mortgage has a rate of 4.09 per cent.

Most major lenders have cut mortgage rates in recent weeks.

This is partly because the Bank of England cut the base rate from 5.25 percent to 5 percent in early August, although lenders had priced that move in to some extent beforehand.

Santander also plans to reduce tomorrow the fixed rate on some of its purchase and refinancing transactions for new customers by between 0.02 and 0.19 percentage points.

Product transfer fees for existing customers will also be reduced by between 0.01 and 0.27 percent.

Leeds Building Society is also planning to cut rates by up to 0.30 percentage points tonight.

Ranald Mitchell, director of Charwin Mortgages, told Newspage news agency: ‘This latest move is yet another salvo in the ongoing mortgage rates war between the UK’s biggest banks, and is music to the ears of consumers across the country.

‘As rates come down, it’s a win-win for anyone looking to get a mortgage.

‘It’s clear that in this competitive landscape, NatWest wants to stay ahead and offer more affordable options for homeowners.’