Before you start trawling the internet for your dream home, it’s always a good idea to do a bit of research into what kind of mortgage you might be able to get.
NatWest Mortgages are some of the most popular and highly rated on the market, with options available for both standard homebuyers and buy-to-let properties. Here we unpack all the details.
NatWest is one of the largest mortgage providers in the UK. Previously part of the Royal Bank of Scotland Group, they have been voted the Best Mortgage Provider for both 2020 and 2019 by the British Bank Awards.
When it comes to their mortgage benefits, NatWest’s main selling points include the following:
● They’ll usually pay their own legal and valuation fees rather than leaving you with the bill
● You can manage your mortgage entirely online, including uploading and signing documents and benefiting from paperless billing
● Some of their mortgages have no product fees, meaning you won’t have to pay to submit your application, have an appraisal done, or for specific paperwork
NatWest offers a variety of different mortgages to suit your needs. As well as standard residential mortgages for first-time buyers or existing homeowners, they also provide:
Buying an investment property you intend to rent out? A NatWest buy-to-let mortgage could be a good fit. NatWest’s lending criteria includes the following:
● A deposit of at least 25%, or 35% if it’s a new build home
● The property’s worth must be more than £50,000
● The expected income you’ll receive from monthly rent payments must be 125% or more of your monthly mortgage payments
● You’re looking to borrow less than £3.5 million
This is when you change your mortgage to a new lender or start a new mortgage with your existing lender, usually because the initial interest rates on your mortgage are coming to an end. If you think your property value has changed (or your financial situation has), you might also want to remortgage to get a better rate.
NatWest offers remortgages, and you’ll be able to apply for one in a similar way to a regular mortgage, including filling out your application online.
Suppose you’re keen to make your house more eco-friendly and energy efficient. In that case, you could qualify for one of NatWest’s green mortgages. These offer you lower mortgage rates for 2 to 5 years, plus £250 cashback.
Your new home will need to have an energy certificate performance (EPC) of A or B to qualify for a green mortgage. NatWest green mortgages are also only available if you’re looking to borrow 85% or less of the value of your property.
We could all do with a little extra cash, especially when moving home. When comparing NatWest mortgages, you’ll likely spot some which have the option to receive cashback.
This means they’ll give you (or your solicitor on your behalf) £250 once your mortgage has been finalised. You can use this money however you wish. Not all NatWest mortgages have a cashback option, although you’ll find their first-time buyer mortgages usually do.
The maximum you’ll be able to borrow from NatWest is 90% of its total value (and only if you meet their criteria). This is sometimes written down as a 90% LTV mortgage.
The exact amount you’ll be allowed to borrow will depend on your individual circumstances and will be laid out when you start your mortgage application. While NatWest previously used to do 95% LTV mortgages aimed at first time buyers, they withdrew these in 2020 due to economic uncertainty during the coronavirus pandemic. These may be reintroduced when the UK economy recovers.
The amount you can borrow will also depend on your income. Many mortgage lenders, including NatWest, use income multiples. This means they’ll multiply your income by a certain amount and use that figure to establish how much they’re willing to lend you.
Currently, NatWest could let you borrow up to 5 times the amount of your annual salary. The exact amount will depend on a few things, including:
● Your credit history
● If you have any debts
● How much you have saved for a deposit
● How old you are
● Your average monthly expenses
NatWest mortgage rates differ depending on what type of mortgage you decide to take out. The mortgage rate is the amount of interest you’ll owe on top of your total loan. It’s usually set against the Bank of England Base Rate, which influences almost all banks and lenders.
If the Base Rate changes, it may cause your mortgage rate to change, too. NatWest promises to notify customers of any changes well in advance, so you’ll have time to rethink if you don’t like what’s coming.
When it comes to NatWest’s specific mortgages rates, here’s a rundown of the different options available:
A fixed-rate mortgage is where the interest rate is set at a standard every year. For example, say you want a loan of £300,000, and the interest rate is 3%. This will stay the same until your agreed fixed period is up.
At NatWest, the initial periods for fixed-rate mortgages tend to be between two and five years. This means you can expect to pay the same amount on your mortgage every month until that timeframe is up.
Unlike fixed-rate mortgages, where your interest rate stays the same, a variable rate mortgage can change.
It’s usually set against the Standard Variable Rate (SVR). This is a rate set out by NatWest, which can go up and down. While you could end up paying more than a fixed rate, there’s also the possibility of paying less, too.
One of the main benefits of choosing a NatWest variable rate is that there are no early repayment charges. So you can decide to pay off your mortgage in one go if you have a sudden windfall.
Like a variable rate mortgage, a tracker rate is fixed to the Bank of England Base Rate. This means the rate of your mortgage will go up and down just as the Base Rate does. Your monthly payments could potentially end up being a lot lower than with a fixed rate or variable mortgage.
With a NatWest tracker mortgage, you’ll also be able to overpay up to 10% of what you still owe on your mortgage every year. Put simply, this means you could end up paying your mortgage off much quicker if the rates work in your favour.
This is a popular option for people with buy-to-let properties. An interest-only mortgage does what it says on the tin. Your regular monthly payments will only cover the interest on your loan rather than the actual loan itself, known as the capital. You’ll then pay off the capital in one lump sum once your mortgage period has ended, so you must have a plan and the finances to do this.
To qualify for a NatWest interest only mortgage, you’ll need to pass several criteria. This includes proving that you earn more than £75,000 a year and providing a repayment plan for the property when your mortgage period ends.
While most people tend to get brand new mortgages when they sell up and move, NatWest allows certain types of mortgages to be transferred over to other properties.
This process is known as porting your mortgage and lets you keep your existing mortgage rate and avoid any early repayment charges. Not all NatWest mortgages qualify for this (although the majority do), and you can arrange a free phone call with an adviser first to see if this is the right option for you.
There’s a variety of reasons why you might suddenly be unable to make your monthly mortgage payments. A mortgage holiday is an agreement you can make with your mortgage lender to temporarily pause or reduce your payments.
Currently, you can get a NatWest mortgage holiday for up to 3 months. You can apply for two in a row, with a total mortgage holiday period of 6 months. Depending on your type of mortgage or your unique circumstances, NatWest will either pause payments or agree to reduce your monthly repayment amounts.
It’s important to know that your interest won’t pause during your mortgage holiday. It’ll continue to build up, leading you to owe more money over time. NatWest will also increase your payment amounts once your mortgage holiday is over to make up for the shortfall.
When it comes to applying for a NatWest mortgage online, you’ll find the process is easy to follow; all you’ll need is some documents and an agreement in principle.
You can apply for a mortgage online with NatWest or make an appointment with a mortgage adviser in a branch. To complete your mortgage application with NatWest, you’ll need the following:
● 3 months of payslips (or tax returns if you’re self-employed)
● 3 months of bank statements to show your income and outgoings
● A good credit score
● To be registered on the electoral roll
Depending on your profession or individual circumstances, you may also need to provide other documents such as a P60, a self-assessment tax calculation form, or a certificate from an accountant.
Just beginning your house buying journey? Before you start setting out a potential budget for what you think you can afford, it’s a good idea to get an agreement in principle. This is a lender certificate showing that they would be prepared to offer you a mortgage if you pass all the application criteria.
NatWest, as well as providing mortgages, also offer agreements in principle. You can see if and how much you’d qualify for on their website by answering a few easy questions about your income and average monthly spending. Natwest agreements in principle won’t affect your credit score.
Note that there’s no obligation to take out a mortgage with NatWest once you’ve received your agreement in principle.
It can be tricky to know when the best time to apply for your mortgage is. Typically, you’ll want to have your agreement in principle in place before you start contacting estate agents, so they know you’re serious about buying.
Once you’ve submitted your mortgage application, NatWest will review it and begin underwriting, which means verifying your income, debts, and other factors. You can expect to wait between 2 to 4 weeks before you get an offer for a mortgage. However, this can sometimes be longer or shorter.
You can speed up your application by ensuring you provide all the necessary paperwork and details from the get-go. This will avoid delays in NatWest coming back to you or your mortgage broker for extra information.
With over 70 different types to choose between, you’ll likely want to see how NatWest mortgages match up with each other and with other providers. Compare mortgages using our handy comparison tool and find NatWest options with low-interest rates and minimal fees.
Which?’s current rating for customer satisfaction puts NatWest at 71%. It also came joint 7th out of 23 providers on their best mortgage lenders survey.
What customers loved best about choosing a NatWest mortgage was:
● How honest and upfront they were about their fees
● Their online mortgage management service
● Their customer service and ability to handle problems and questions
Think a NatWest mortgage might be a good fit for you? Take a look at our mortgage guides for more information about the types of mortgage available. You can also use our mortgage affordability calculator to work out what you might be able to borrow.