NatWest has launched a sub-4% mortgage deal – one of only two that are on the market.
However, there are various restrictions around the deal which home buyers need to be aware of before jumping on the deal.
The five-year fixed rate of 3.97 percent is attractive, but it comes with a hefty fee of £1,495 and is only available on a loan-to-value figure of 60 percent.
That means the buyer must have a deposit worth at least 40 percent of the purchase price.
Separately, it is only available online to customers who contact the bank directly rather than through mortgage brokers.
The equivalent deal via NatWest through brokers is a more expensive 4.03 percent and comes with the same fee.
Data experts Moneyfacts confirmed the NatWest direct-only deal is one of only two sub-4 percent deals available on the market at the moment. The other is from Nationwide, but is available through brokers as well.
Brokers are angry that they have been barred from offering the cheaper rate deal.
Mortgage technical manager at John Charcol, Nicholas Mendes, said: “It’s disappointing to see a lender offer a product exclusively for direct clients, especially given the significant volume of business that flows through intermediaries.
“This approach seems short-sighted and overlooks the value and trust intermediaries bring to the lending process.
“It’s crucial to ensure fair and equal opportunities for all clients, regardless of their approach.”
Moneyfacts personal finance expert Rachel Springall said buyers should be aware that other banks and building societies are likely to be cutting their fixed-rate home loans in the coming days.
This is in response to the Bank of England’s decision to cut the base rate a quarter point to 5 percent and falls in the swap rates, which are the interest rates financial institutions charge each other to borrow money.
She said: “There is still lots of room for fixed mortgage rates to come down, not just in response to the recent base rate cut, but also as lenders catch up to a falling swap rate market.
“A low-rate mortgage may well grab the headlines, but it’s vital borrowers pick a deal based on the overall true cost of the mortgage.
“An independent broker can help borrowers assess which deal is the most suitable for them, considering the initial rate, fees, and any incentives.”
Senior mortgage consultant at Private Finance, Chris Sykes, told Mortgage Strategy: “If lenders start dual pricing deals direct versus brokers it becomes more complex for borrowers. All channels should have the same pricing.
“It is probably Natwest just wanting to stir publicity their way, even though this product will not be right for 95 percent of borrowers.
“Just because Natwest are cheaper with one very specific product, it doesn’t mean they will be for other situations, and it is important to seek proper advice on the best avenues.”
