It is the first major bank to raise interest rates across their full range for several weeks, and comes as Barclays announced it would cut rates.
However, experts fear other lenders will follow NatWest’s lead and borrowers may now see further rates start to rise.
In fact, according to the news outlet, Suffolk Building Society has withdrawn all fixed interest rates “for the time being” as lenders struggle to secure financing at affordable rates.
Justin Moy, Managing Director at Chelmsford-based EHF MortgagesSpeaking to Newspage, he said: “Definite news from NatWest this morning: the cost of borrowing has increased over the past week or so, not just because of the conflict but also because of government unrest, which has further unnerved markets.
“Uncertainty drives up interest rates and costs borrowers more in the long run. The overall 0.2% increase in purchase, remortgage and BTL rates is more than enough to make a difference, and just goes to show that inflation is not the only factor in mortgage pricing.”
What should borrowers do?
If you’re a borrower about to take out a mortgage or remortgage, you could be forgiven for feeling somewhat confused about what’s going on in terms of interest rates.
Indeed, NatWest raising rates and Barclays cutting fixed interest rates on the same day is confusing to say the least.
As such, it is essential to seek advice from a mortgage broker to help you find the best deal to suit your needs. Focusing on your own homebuying or remortgaging needs, rather than guessing what lenders might do, is key.
Rachel Geddes, director of strategic lender relationships at Mortgage Advice Bureau, said: “Although mortgage rates are still expected to fall gradually overall, borrowers should not expect a completely straight downward path, as rates are likely to continue to fluctuate in response to market expectations.”
“For anyone planning to buy a home or remortgage this year, this is an important reminder that mortgage rates can change quickly and without warning.
“Reviewing your options early and seeking expert mortgage advice can make a big difference when it comes to securing the most suitable deal and managing your monthly repayments.”
