NewBuy rates rise barely two months after their launch

Lenders have increased rates on their NewBuy Guarantee products, less than two months after launching them.

Under the scheme, which started in March, lenders offer 95% LTV mortgages on new-build properties against a mortgage indemnity guarantee funded jointly by builders and the government up to 9% of the property value.

NatWest has increased the rate on its products by 0.5%, so it now offers a two-year fixed at 4.79% and five-year fixed at 5.49%.

Nationwide has increased its three and five-year fixes by 0.2% and 0.1% respectively, meaning it now offers a 5.89% three-year fix and 6.09% five-year fix.

Barclays has replaced its 4.99% two-year fixed rate and 5.89% four-year fixed with a 6.09% three-year fix.

Dominik Lipnicki, director at Your Mortgage Decisions, says: “It is taking advantage of people who have small deposits. This means fewer people will be able to afford to take out the mortgage when the point of the scheme was to ensure more could.”