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Blow to self-employed as NatWest stops lending to government grant recipients

Paloma Kubiak
Written By:
Paloma Kubiak

NatWest has pulled the plug on mortgages offered to those who receive the Self-Employment Income Support Scheme (SEISS) grant.

Since 14 July anyone applying for the government help has had to confirm their business has been impacted by Covid-19.

As such, the bank is now declining income that has come from a business in receipt of the grant over the last four months.

The bank said: “At this time our primary purpose remains to ensure that any mortgage we provide to customers is affordable.”

NatWest is also tightening its residential affordability assessment.

In a message to advisers, the lender said it was making a change to background affordability calculations “to ensure we continue to lend responsibly when assessing customers’ current and future mortgage eligibility”.

It warned: “As a result of the affordability changes, there may be a reduction in the maximum lend compared to previous affordability assessments.”

The changes come after the lender last week toughened buy-to-let affordability calculations, while changing its interest-only mortgages.

Rate changes and reintroduction of free valuations

NatWest has also increased rates by up to 20bps across its core remortgage range, while pushing up rates by to 20bps and 19bps on selected two and five-year deals at 70% loan to value (LTV) and above respectively.

Rates are falling on the product switch range by five bps on two-year 60% LTVs.

The lender is also reintroducing free valuations for intermediary purchase products.