Tag: finance

Mortgage rates between 3.5% and 4.5% will be the “new normal” even after base rates begin to fall, says the head of the UK’s biggest home loan lender.  

“We have just come off a decade where mortgages have been in the 1.5% and 2.5% range,” Lloyds Banking Group chief executive Charlie Nunn told Sky News.  

“The expectation that markets have is that interest rates won’t get below 3.5% — and that means that the new normal for mortgages will be in that 3.5% and 4.5% range.”  

Nunn warned that these rates will not come to market until the Bank of England begins a series of base rate cuts.  

The base rate has remained at a 16-year high of 5.25% since last August. The last time the central bank cut rates was in March 2020. 

High street lender Natwest will cut new business and existing customer rates by up to 0.23%, including purchase and remortgage deals.

On the purchase side, Natwest’s two- and five-year deals will fall by around 0.12% and 0.23%. This includes its fee-free two-year fixed rate at 95% loan to value (LTV), which has fallen from 6.27% to 6.04%.

In its remortgage range, two- and five-year deals will fall by around 0.08% and 0.13%. Its two-year fixed rate at 80% LTV with a £995 fee will go down from 5.66% to 5.53%.

Purchase and remortgage high-value deals will contract by around 0.1% and 0.13% respectively.

Within Natwest’s first-time buyer range, cuts of around 0.05% and 0.06% will apply. An example includes its five-year fixed rate purchase with no fee and £250 cashback at 90% LTV falling to 5.02%.

With the cost of living continuing to apply mounting pressure onto people’s wallets, many homeowners may be concerned with paying their mortgages.

If you feel that you’re barely struggling with keeping up with your mortgage payments, there are some things you can do to help you manage. Experts at Citizens Advice have highlighted that looking for a new mortgage deal might not be the best option.

They noted that it may be difficult “to find new mortgage deals at the moment”, but this doesn’t mean that you can’t still save money in other ways. It’s important to note that if you have already missed a mortgage payment, you should prioritise paying what you owe as growing debt can result in a lender taking you to court and ultimately lead you to losing your home.

The value of gross mortgage lending rose to £22.2bn in May, the fourth consecutive month to see an increase, data from the central bank showed.

The Bank of England (BoE) Money and Credit report showed this was up from £21.1bn in April and higher than the six-month average of £18.7bn. 

Gross mortgage repayments also rose from £19.3bn to £20.5bn from April to May. 

The net borrowing of mortgage debt fell from £2.2bn to £1.2bn month-on-month.

Karen Noye, mortgage expert at Quilter, said the decrease in net mortgage borrowing highlighted the “cautious approach buyers are taking amidst an unpredictable economic outlook and fluctuating mortgage rates”. 

NatWest has cut selected fixed rate mortgage deals, available direct and through brokers, by up to 0.23 percentage points, effective from tomorrow (2 July), writes Jo Thornhill.

It follows cuts of up to 0.17 percentage points to fixed rate deals by the bank less than two weeks ago.

Among the newly-priced deals is a five-year fixed rate for purchase at 4.34%, or 4.77% over two years. For remortgage, five-year rates are available at 4.41%, or 4.81% over two years. These deals are all available at 60% loan to value and come with a £995 product fee.

NatWest has also cut rates on its product transfer deals (those for existing borrowers looking for a new rate). For these customers the bank is offering a five-year fixed rate at 4.46% or a two-year rate at 4.86%. Both deals are at 60% LTV and charge a £995 fee.

Selected buy-to-let (BTL) deals at NatWest have been cut by up to 0.18 percentage points. Deals for BTL remortgage start from 4.81% fixed over two years, or 4.66% fixed over five years. These deals are available at a 60% loan to value and come with a £3,499 fee. BTL deals with a lower product fee are available at higher rates.