The Base Rate tracker mortgage offers homebuyers a rate of 4.99 per cent over two years and is available for loans between £20,000 and £500,000.
Additional features include annual capital repayments of up to 10 per cent of the mortgage balance permitted, daily interest, free standard valuation up to £200, no extended tie-in after the tracker period and the option to borrow up to 90 per cent LTV.
After two years a standard variable rate of 6.79 per cent will apply. There is also an early repayment charge of 3 per cent should the loan be partly or fully redeemed in the first two years. Remortgage customers benefit from free legal fees although a completion fee of £495 applies.
Kevin Robinson, chief executive of Universal Building Society, said: “This new Base Rate tracker is further proof of Universal’s reputation for competitive mortgage products. We expect demand to be high.”
Thomas Reeh, chief executive of the Black & White Group, said that the product was competitive but that customers appreciated good service above short-term discounted rates.
He said: “Rates are rates and it’s confusing for many mortgage customers. The Base Rate tracker rates are great but give us the service.
“Customers in the UK have a ‘can’t be arsed’ factor when it comes to switching mortgages and the rate of 6.79 per cent after two years is not that swish.
“We tend to put customers into more long-term deals with long-term value rather than temporary discounted ones.”
Ray Boulger, senior technical manager at John Charcol, questioned the optimism of Universal’s chief executive.
“I wonder why he expects demand to be high. It’s slightly uninteresting. The rate is too high compared, for example, to Nationwide who offer a rate of 4.79 per cent for two years.”
