Type: Self-cert tracker mortgage
Tracker term: Three years
Tracker rate: 0.64% above Bank of England base rate
Payable rate: 5.39%%
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 four times principal income plus second or 3.25 times joint
Conditions: Free valuation
Arrangement fee: £495
Redemption fee: 3% of mortgage balance in first three years
Introducer’s fee: Refer to lender
Tel: 0845 940 1400
The UCB Home Loans Self-Cert Standard 3-Year Tracker is available at a payable rate of 5.39 per cent for loans up to 85 per cent of valuation.
Franklins Financial Services partner Neil Franklin believes self-cert deals are always useful for clients such as the self employed with more than one source of income or those with foreign earnings.
“UCB is usually good to deal with and has a good product at a reasonable price, but a little lower differential would make it a strong competitor in the market. The rate is good but there are better rates ,” he says.
In his view, being part of the Nationwide is helpful and he likes the fact that there is no higher lending charge on this deal. He is also positive about the predictable pricing that is possible through a Bank of England tracker. “The requirement for life cover will increase earnings on occasions,” he says.
On the downside, Franklin feels that UCB’s refusal to lend on ex-local authority flats is odd. “Reductions from earnings could also cause problems, as could the limit on capital raising,” he says.
Franklin notes that after the tracker period expires, the rate reverts to UCB’s standard variable rate. This currently stands at 7.05 per cent, which Franklin regards as high, and he expresses a concern that it may drift higher. “A rate linked to the Bank of England base rate in the long term would be welcome,” he says.
Competition will come from Northern Rock in Franklin’s opinion, as well as various lower rates with big administration and arrangement fees. Franklin suggests Mortgage Express as an example and also mantions fast track deals from mainstream lenders such as Halifax and Abbey, which are not offered on a self-cert basis.
Suitability to market: Good
Competitiveness of rate: Good
Adviser remuneration: Good