Overview: NatWest and Lloyds Bank
NatWest (National Westminster Bank) has roots going back to 1968 through a merger of National Provincial and Westminster banks, though the constituent institutions trace back to the eighteenth century. NatWest Group plc is the majority owner of NatWest Bank, Royal Bank of Scotland, and Ulster Bank, and remains partially government-owned following the 2008 financial crisis support package. NatWest operates one of the UK's largest branch networks and has a major mortgage lending operation serving hundreds of thousands of customers across England and Wales (with Royal Bank of Scotland serving Scotland through broadly equivalent products).
Lloyds Bank traces its history to 1765 and has grown through a series of mergers and acquisitions to become one of the UK's largest retail banks. Lloyds Banking Group owns Lloyds Bank, Halifax, Bank of Scotland, and several insurance and investment brands. As a high street bank with a large current account base, Lloyds has a natural opportunity to cross-sell mortgage products to its existing customers, and this banking relationship plays a role in its mortgage underwriting and customer retention strategy.
Both NatWest and Lloyds are mainstream, full-service high street banks offering a broad range of mortgage and remortgage products including fixed rates (two, five, and ten-year), trackers, and offset mortgages. Their core remortgage propositions are broadly comparable in scope, and both are well established in the broker-distributed mortgage market.
Rate and Fee Comparison
NatWest and Lloyds are generally competitive within a similar range for standard residential remortgages, and their headline rates tend to track each other fairly closely at the main LTV bands. NatWest's notable differentiator on pricing is its Green Mortgage range, which offers cashback incentives for properties with an EPC rating of A or B. This cashback — which has ranged from several hundred pounds to over £1,000 on selected products — can meaningfully improve the overall value of a NatWest remortgage for eligible borrowers. As environmental standards for housing improve and more properties achieve higher EPC ratings, this feature is likely to become more widely applicable.
Lloyds' remortgage pricing is competitive across the standard LTV range, with both fee-paying and fee-free options available. Lloyds is part of the same group as Halifax, which is typically the more prominent and aggressively priced mortgage brand within the group. This can sometimes mean Lloyds' rates are not quite as sharp as Halifax's equivalent products, though the differences are often small and vary by LTV band and product type. Cashback deals are available on selected Lloyds remortgage products and free legal work and free valuation are standard features on most remortgage packages.
For borrowers whose property does not qualify for the NatWest Green Mortgage cashback, the choice between the two lenders on rate and fee grounds alone tends to be marginal. The overall cost calculation — rate multiplied by loan amount over the fixed period, minus any cashback, plus any arrangement fee — should be done on both lenders' current illustrations to identify the genuine cheaper option for your specific circumstances.
