NatWest Raises Mortgage Rates Despite Declining Inflation
NatWest confirms higher mortgage rates despite inflation going down

Image: Birmingham Live
NatWest has increased mortgage rates by 0.2%, becoming the first major lender to do so despite a drop in inflation from 3.3% to 2.8%. This decision reflects ongoing market uncertainties, including geopolitical tensions and political instability in the UK, prompting concerns that other lenders may soon follow suit.
- 01NatWest's mortgage rate increase applies to purchase, remortgage, and buy-to-let products.
- 02The inflation rate dropped to 2.8% in April, yet mortgage rates are rising.
- 03Suffolk Building Society has withdrawn all fixed-rate mortgages amid funding challenges.
- 04Justin Moy from EHF Mortgages indicated that rising borrowing costs are influenced by both geopolitical conflict and government instability.
- 05Experts recommend sticking with fixed rates for stability in uncertain market conditions.
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NatWest has announced a 0.2% increase in mortgage rates across its full range of products, including purchase, remortgage, and buy-to-let options, effective from May 21. This decision comes despite a drop in the inflation rate from 3.3% to 2.8% in April, highlighting the impact of ongoing geopolitical tensions, particularly the conflict in Iran, and political instability in the UK. Brokers have expressed concerns that this move may lead other lenders to follow suit, as evidenced by Suffolk Building Society's withdrawal of all fixed-rate mortgages due to difficulties in securing funds at reasonable rates. Justin Moy, Managing Director at EHF Mortgages, noted that the rising costs of borrowing are driven by uncertainty in the market, which can affect borrowers in the long term. Mortgage broker Martin Rayner emphasized the importance of fixed rates for stability, advising borrowers to avoid chasing the lowest rates that may expose them to future hikes. As the market evolves, borrowers are encouraged to consider their options carefully.
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The increase in mortgage rates will affect homebuyers and those looking to remortgage, potentially leading to higher monthly payments and increased borrowing costs.
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