Borrowers who are coming to the end of a fixed, discount or tracker deal with Halifax, Abbey, Lloyds TSB, C&G, Woolwich and Barclays are invited to challenge NatWest to see if they could lower the monthly repayments on the new deal they are being offered by their lender. If NatWest are unable to do this, they promise to give these customers £1,000.
However this only applies to customers of those specified competitors who are currently paying a mortgage of at least £50,000 with a loan to value of 75 per cent or less.
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NatWest has simplified its mortgage process to coincide with this, making it easier and quicker to remortgage and also reducing the upfront cost of switching lender. Borrowers can choose whether to have the lowest pay rate possible and pay associated fees, or select a fees assisted/fee saving deal where legal and valuation costs are covered.
Julia Harris, mortgage analyst at Moneyfacts.co.uk believes it is little more than a marketing ploy to entice borrowers through the door. However she does give the lender a fair bit praise:
It is pleasing to see one of the big five banks taking a stand and challenging its competitors, rather than resting on its laurels, relying on its brand and existing customers. This is by far the largest price promise we have seen, and is the only lender to currently offer such a challenge.
As the comparison charts show, the deal used for comparison used by NatWest is unbeatable, based on the monthly repayments of the deals from the four lenders which match the challenge criteria, continues Harris. The £1,000 challenge is therefore somewhat of an empty promise.
If you do fit into the slightly limited criteria set by the NatWest mortgage challenge, it can be a pretty competitive deal. But as each and every one of us will have difference circumstances, it is still wise to search the whole market. It may be that you want a low rate high fee combination, or value the incentives cash back or flexible features other mortgage deals may offer.
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While the challenge will ensure the lowest possible monthly repayment is achieved between the lenders in question, it is also important to mention that when switching mortgage providers, the monthly repayment and the headline rate are only part of the picture. Switchers must look at the whole mortgage package, including the rate, fees, incentives and flexibility.
