NatWest removes 90-day period for Track and Switch mortgage rates
NatWest for Intermediaries has changed its rules to allow borrowers who take one of its tracker mortgages to instantly switch to a fix if fixed rates fall.
As part of NatWest's Tracker mortgages, the bank previously allowed a customer to switch to a new fixed rate without any early repayment change after 90 days.
From the 14th of September, borrowers can switch to a fixed mortgage product at any time once their Tracker rate is live. The move will give customers increased flexibility.
Are NatWest's tracker rates competitively priced?
NatWest's tracker rates are more expensive than its competitors like Barclays and HSBC. Its rates are also not directly linked to the Bank of England, they follow the bank's internal base rate.
HSBC's lowest variable rates track the Bank of England base rate plus a margin of 0.19%, while Barclays most competitively priced rate is 0.15% over the base rate. NatWest's lowest rate is 0.54% over the NatWest base rate, which is also 5.25% in line with the current Bank of England base rate.
It is also worth noting NatWest's trackers have early repayment charges, while many other lenders have rates without changes for repaying early.
Why are so many borrowers taking tracker rates?
Most people taking trackers are looking to switch to a fix when rates come down. They hope the Bank of England has had enough of putting up the base rate.
Trackers are usually taken by borrowers who have funds to cover increases to their monthly repayments. More clients are also taking offset mortgages and using their savings to reduce the higher payments they have incurred by remortgaging to a higher rate.
Should you take a five-year fixed-rate mortgage?
More borrowers will look at five-year fixes at the moment because they now start at five per cent. Many will be tempted to opt for payment security rather than risk more rate hikes, which have constantly happened with trackers over the last 18 months.
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The information contained within was correct at the time of publication but is subject to change.
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