Type: Self-cert flexible fixed rate mortgage
Fixed term: Two years
Fixed rate: 5.14%
Minimum loan: 25,001
Maximum loan: Up to 85% of valuation subject to a maximum of 500,000, up to 75% of valuation subject to a maximum of 750,000, up to 65% of valuation subject to a maximum of 1m
Income multiples: Up to 3.25 times principal income plus second or 2.75 times joint
Flexible features: Overpayments up to 500 a month, underpayments, payment holidays, lump sum withdrawals of at least 500, interest calculated daily
Arrangement fee: 330 plus 75 reservation fee
Redemption fee: Six months interest in year one, five months interest in year two
Introducers fee: Subject to negotiation
Tel: 0845 940 1404
This UCB Home Loans self-cert deal is fixed at 5.14 per cent for two years and is available for loans up to 85 per cent of valuation.
Discussing demand within the self-cert market London & Country mortgage specialist James Cotton says: The self-cert market continues to grow, giving borrowers and brokers a considerable amount of choice. This new deal from UCB offers rate of 5.14 per cent fixed for two years with no extended early redemption penalties. The arrangement fee adds up to 405 and the deal offers a range of flexible features.
Cotton points out that borrowers can make overpayments of up to 500 per month free from early redemption penalties and also have the option to borrow back any previous overpayments subject to a 500 minimum withdrawal. He notes that payment holidays are also available subject to previous overpayments.
The flexibility is certainly as useful feature for those who want it, but the 500 a month limit might restrict some borrowers. On a 150,000 mortgage, 500 per month equates to overpayments of just 4 per cent a year.
Looking for alternative deals on the market Cotton says: There are some considerably lower rates in this sector, however they do carry higher arrangement fees, depending on loan size. The Mortgage Works for example has a rate of 4.69 per cent with an arrangement of 1.5 per cent of the loan. Platform has a rate of 4.95 per cent with a 0.75 per cent fee. That said, neither offer the same flexibility.
He concludes that Bank of Scotland has a rate of 4.95 per cent which allows overpayments of 10 per cent a year and has underpayment and payment holiday options. GMAC at 5.19 per cent and Coventry at 5.09 per cent both allow early redemption charge-free overpayments and offer incentives.
Suitability to market: Good
Competitiveness of rate: Average
Adviser remuneration: Average