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UCB fixes buy-to-let



Type: Fixed-rate buy to let mortgage

Fixed rate: 5.29%

Fixed term: Five years

Minimum loan: £25.001

Maximum loan: Up to 80% of valuation subject to a maximum of
£300,000, up to 75% of valuation subject to a maximum of £400,000

Income multiples: Up to 3.25 times principal income, 2.75 times joint,
or rental income must be at least 6.5 times mortgage amount

Redemption fee: Six months&#39 interest in years one to three, five
months&#39 interest in year four, four months&#39 interest in year five

Arrangement fee: £495

Introducer&#39s fee: Subject to negotiation

Tel: 0845 940 1400

This buy-to-let mortgage is fixed at 5.29 per cent for five years and
offers flexible features such as overpayments at the end of the
fixed-rate period.

Priestfield Webber proprietor Malcolm Martin views the mortgage as
suitable for medium-term investors who feel that interest rates will
rise within the next five years. He says: “The rate is fixed at the
competitive end of the market. The flexible nature of the mortgage, in
allowing overpayments without a redemption charge, will attract
potential investors who require the stability of a fixed-rate mortgage
but who want to reduce the loan more quickly than a conventional
fixed-rate mortgage.”

Martin thinks the arrangement fee of £495 compares favourably in the
South of England and Greater London than the conventional 0.5-1 per
cent charged by some competitors. He sees the introducer&#39s fee as
par for the course.

When asked what he dislikes about the product he says: “UCB Home
Loans only provides a 80 per cent maximum loan to valuation, which
does not compare well with many lenders that will provide 85 per
cent. It only allows a maximum of two properties to be bought, which
does not cater for the professional landlord who would want to place
his portfolio with one lender. The affordability structure is a rather
complicated formula compared with most lenders&#39 policy of 125 per
cent to 130 per cent of the interest-only payment.”

Irish Permanent&#39s base rate tracker at 4.74 per cent is seen by Martin
as a potential competitor because it provides loans of up to 85 per
cent of valuation and has no early redemption penalties attached.

Martin concludes: “UCB Home Loans will attract an amount of
business from the occasional investor who wants a mortgage with a
guaranteed monthly commitment over the medium term. But it will not
be attractive to serious clients who want to build a sizeable portfolio.”


Suitability to market Fair

Competitiveness of mortgage rate Fair

Flexibility Fair

Overall 7/10


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