A recent NatWest £1,000 cashback incentive has been slammed as an “empty promise”.
NatWest is offering to pay £1,000 to customers of Halifax, Abbey, Lloyds TSB, Cheltenham & Gloucester, Woolwich and Barclays, if they switch to NatWest, but find their monthly repayments are not any lower.
Julia Harris, mortgage analyst at Moneyfacts.co.uk, says: “While it is great news to see NatWest encouraging borrowers to remortgage to a better deal, the £1,000 mortgage challenge is little more than a marketing ploy to entice borrowers through the door.
“This is by far the largest price promise we have seen, and NatWest is the only lender to currently offer such a challenge. But with so many caveats to the deal, it makes it a sure fire win for NatWest.”
Terms of the offer include a minimum mortgage of £50,000 with a maximum LTV of 75%, it excludes internet, staff concessionary, buy-to-let, stepped, offset, current account, extended tie-in and products with arrangement fees greater than £999.
The monthly repayment comparison is made against NatWest two-year base rate tracker at 5.14%
Harris adds: “The deal used for comparison by NatWest is unbeatable, based on the monthly repayments of the deals from the four lenders which match the challenge criteria.
“The £1,000 challenge is therefore somewhat of an empty promise.
“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.
“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 different circumstances, it is still wise to search the whole market.”