NatWest hiked rates for the second time in a week on 30 March. The UK's biggest mortgage lender raised new business, product transfer, and additional borrowing rates, with many deals jumping 28 basis points (bps, where 100bps = 1%). If you're mid-application or thinking about a BTL (buy-to-let) remortgage, here's what the numbers mean for your monthly outgoings.

What's Changed at NatWest

NatWest's two-year fixed rate climbed from 4.47% to 4.75%, according to Mortgage Finance Gazette. The lender's lowest tracker rate rose 28bps from 4.19% to 4.47%. On a £150,000 interest-only mortgage at the old rate of 4.47%, your monthly payment would run to around £559. At the new rate of 4.75%, that same borrowing costs roughly £594 per month - approximately £35 more each month. Run the numbers across your whole portfolio and a 28bps move stings.

Rising funding costs are the culprit. Oil prices above $116 per barrel are squeezing bank funding costs. Lenders are repricing aggressively to protect margins. Nicholas Mendes at John Charcol told Mortgage Finance Gazette: "It points to another difficult week ahead, with lenders still trying to balance rising funding costs against service levels."

What's Next

More rate moves are coming. Aaron Strutt at Trinity Financial expects the lowest fixed rates to drift toward 4.75% to 5% in the weeks ahead. If you're shopping around or mid-application, you may wish to contact your broker to understand where rates are locked versus floating on your deal. The gap between today's pricing and next week's could easily add £50-100 per month on a standard BTL purchase.