Compare different mortgage options: 20 March rate call by the Bank of England.
Starting tomorrow (21 March), NatWest will be lowering specific five-year fixed rates for both purchasing and refinancing. The bank’s decision to lower interest rates comes in response to the official numbers indicating a decrease in inflation from 4% to 3.4% in February. Mortgage brokers are optimistic that declining inflation may prompt an earlier-than-expected reduction in interest rates, resulting in more affordable mortgage agreements. The upcoming Bank of England interest rate decision is scheduled for tomorrow at noon. However, it is anticipated that there will be no alteration to the current interest rates at this juncture.
NatWest has reduced its five-year fixed rate for home purchases by 0.05 percentage points to 4.19%, accompanied with a £1,495 charge. This is intended for borrowers who have a minimum cash deposit of 40% or a loan-to-value (LTV) ratio of 60%. The comparable agreement with a loan-to-value ratio (LTV) of 80% will now commence at an interest rate of 4.47%. In addition, the lender has reduced the interest rates for five-year fixed mortgages related to shared equity purchases, Help to Buy shared equity remortgages, and both buy and remortgage green mortgages.
The remortgage rates for a five-year term have been reduced by a maximum of 0.24 percentage points. The available offers begin at 4.28% (with a loan-to-value ratio of 60%) and need a charge of £1,495. The comparable agreement with a loan-to-value ratio (LTV) of 80% commences at an interest rate of 4.94%. However, NatWest has increased the price of certain two-year tracker rate mortgages by as much as 0.4 percentage points. The two-year agreement for borrowers with 40% equity or deposit will commence at an interest rate of 5.79% and include a fee of £995. The tracker rate has increased from being 0.14 percentage points above the Bank of England Bank Rate to 0.54 percentage points above.
Nick Mendes, a broker at John Charcol, stated that although today’s inflation statistics exceeded market expectations, the financial markets are still anticipating the first drop in the Bank Rate to occur between June and August. “Mortgage rates have temporarily stabilized, but lenders are still making small increases to reflect the lack of significant movement in the financial markets.” In general, lenders will be assessing their service levels and new business to find a balance, as there is now the expectation that activity will increase in June.
“The financial markets will closely monitor the Bank of England governor’s notes tomorrow, particularly any divergence in voting on interest rates, as this may indicate potential future rate changes.” Precise Mortgages has ceased offering five-year fixed-rate buy-to-let contracts with loan-to-value ratios of 70% and 75% as of 5pm today (20 March). Currently, the starting interest rate for five-year transactions with a loan-to-value ratio (LTV) of 70% is 4.39%, accompanied by a fee of 7%. Alternatively, for a 75% LTV, the interest rate starts at 4.79% with a fee of 5%.
