In addition, the lender will also expand its remortgage offer to include all self-certification mortgages.
Fixed rates on all self-certification and buy-to-let mortgages are being reduced from 5.69% to 5.49%.
“The rate drop will save a borrower on a 2 year fixed rate with a £150,000 mortgage around £432 during the benefit period,” said Keith Astill, managing director at UCB Home Loans. “For those moving to UCB Home Loans from another lender, there will be additional substantial savings as a result of the remortgage offer.”
The reduction in rates is accompanied by an expansion of the lender’s remortgage offer – currently available only on buy-to-let products – to include all self-certification remortgages. Under the remortgage offer, the £75 reservation fee will be waived for all borrowers moving to UCB Home Loans and they will also benefit from a free standard property valuation. Savings range from £305 for properties valued up to £100,000 to over £805 for those valued at £1,000,000 or more.
“The rate reduction and remortgage offer puts us in a very strong position when compared with other lenders in the self-certification and buy-to-let markets,” said Keith Astill. “We know from previous experience that the removal of the reservation and valuation fees can more than double the number of borrowers moving to us from other lenders.
“There is a pool of over 1 million borrowers who are due to come off mortgage deals in 2005 and 2006 and a large proportion of these will be looking to move to new lenders in order to obtain a better deal,” he said. “We are aiming to attract and retain a healthy proportion of those who are looking for similarly attractive mortgage offers.”
“Since the introduction of mortgage regulation at the end of October last year, sourcing systems have emerged as the number one research tool for brokers, with interest rates being the main driver,” said Keith Astill. “Other factors, such as special offers and the variety of flexible features available, are not always obvious on the charts that the sourcing systems produce, with the result that lenders with the lowest rates often appear as the best proposition.
“Many lenders have been cutting their headline mortgage rates in an attempt to jump up the tables, whilst at the same time recouping margin by loading their fees,” he said. “We are reducing interest rates, but will not be making any compensatory increase in fees – in fact on remortgages we are reducing them.
“As part of the Nationwide group, we already have a good reputation for service. Our aim in reducing rates is to develop a competitive proposition that combines good pricing with competitive fees and a wide range of flexible features,” he said. “The remortgage offer takes the concept a stage further, by cutting out reservation and valuation fees completely for people moving their mortgage to UCB Home Loans.”
