NatWest slashes mortgage rates across multiple products, offering festive relief to borrowers

NatWest has implemented changes to its mortgage product lineup, including rate reductions across several categories and updated end dates for two-year and five-year fixed terms. The lender has introduced notable rate decreases across its product portfolio, impacting residential, buy-to-let, green mortgages, shared equity, and Help to Buy deals.

The reductions range from six basis points (bps) to as much as 39bps, depending on the product type and term length. For residential purchase deals, there are decreases of up to 10bps on two-year fixes and 14bps on five-year fixes. For remortgages, cuts of up to 16bps for two-year fixes and 7bps for five-year fixes have been announced. Buy-to-let products have seen the most significant reductions, with purchase rates down by 34bps (two years) and 36bps (five years), and remortgage rates down by 39bps (two years) and 35bps (five years).

Green mortgages, both residential and buy-to-let, have also seen significant cuts, with reductions of up to 32bps on two-year fixes and 23bps on five-year deals. The updates also affect high-value products, shared equity deals, and Help to Buy remortgages, making them more attractive to borrowers.

The high street lender has also extended its two- and five-year fixed-term end dates. Two-year terms now conclude on April 30, 2027 (previously March 31, 2027), while five-year terms now conclude on April 30, 2030 (previously March 31, 2030).

Iain Swatton, Director at Exemplar Financial Services, said: "NatWest’s rate cuts just before Christmas are a welcome gift for borrowers, bringing some much-needed festive cheer to the mortgage market. After weeks of rate hikes that felt more like Scrooge’s doing, this could mark the start of a positive shift. Borrowers will be hoping other lenders follow suit, making the season a little brighter for those looking to secure a mortgage or remortgage."

Simon Bridgland, Director at Release Freedom, echoed the optimism and highlighted the potential ripple effect: "If rates continue to fall, it really could be a happy new year. Any December rate cut by a lender the size of NatWest should help see a flurry of other lenders follow for the winter. So borrowers could be delivered a Christmas present of their payments heading south."

In a similar vein, Emma Jones, Managing Director at Whenthebanksaysno.co.uk, said: "It's starting to feel like the tide is turning. After a grim five weeks following the Autumn Budget, we're finally getting some more upbeat news for borrowers. Let's hope this sets the tone for 2025, bringing some much needed relief for mortgage borrowers."

Daniel Hobbs, Managing Director at New Leaf Distribution, commented on the broader implications of NatWest's move. He said: "A major lender like NatWest cutting rates is sure to send signals to other lenders. For a number of months ahead of the Budget rates were falling and, after a month-long hiatus, the mood in the mortgage market looks to be improving."

Rohit Kohli, Director at The Mortgage Stop, remarked: "Rate cuts are always welcomed by borrowers, but this comes at a time when the market is seasonally slowing so will benefit fewer people. Hopefully other lenders follow suit and these reductions stick or, better still, continue into January."