NatWest increases its mortgage rates again – experts warn rates could hit 6%

A further rise in mortgage rates by NatWest has been described as “disappointing but not unexpected” by one expert who warned rates of 6% could become “a real possibility”.

The bank hiked its rates again by 0.28% for all mortgage types this morning, as the conflict in the Middle East continues to cause volatility in the mortgage market.

Swap rates have risen by around 4.15% to 4.70% since the start of the Iran war, Newspage told the Money blog, which has fed into rising mortgage costs.

Justin Moy, managing director at EHF Mortgages, told Newspage that it marked a “disappointing but not unexpected start to the week”.

He warned oil and inflationary pressures could see other lenders follow suit, and said: “There is a real chance that rates will push closer to 6% by the end of April if we see no improvement in the Middle East over the coming weeks.”

This view was echoed by Shaun Sturgess, director at Sturgess Mortgage Solutions, who said rates could “continue to deteriorate in April”.

But he urged first-time buyers to seize the opportunity to “negotiate very hard as they hold all the cards right now”.

Meanwhile, Adam Stiles, managing director at Helix Financial Partners, said NatWest rising rates “by a large margin” was “concerning”.

He added: “Whilst we originally thought the large increases were to weather the volatility, the volatility is so large that these sizeable rate increases are becoming more and more regular. We need stability and we need it now.”