Ulster Bank cuts mortgage rates to support £500m lending push

10th May 2010

Ulster Bank is today cutting some of its mortgage rates to support its push to lend £500 million for mortgages in Northern Ireland this year.

The bank is reducing three of its offerings, including a two-year discounted variable rate for lending up to 75 per cent loan-value, which is being cut from 3.19 per cent to 2.99 per cent. At the end of a fixed or discounted period, the mortgage rate applicable will be Standard Variable rate currently 4.0% unless the consumer chooses another product. The overall cost for comparison is 3.9% APR.

It is also cutting two of its two-year fixed rate deals. The two-year fixed rate for loan to values up to 75 per cent is being reduced from 3.99 per cent to 3.78 per cent. At the end of a fixed or discounted period, the mortgage rate applicable will be Standard Variable rate currently 4.0% unless the consumer chooses another product. The overall cost for comparison is 4.1% APR.

The two-year fixed rate for loan to values up to 90 per cent is being reduced from 5.89 per cent to 5.29 per cent. At the end of a fixed or discounted period, the mortgage rate applicable will be Standard Variable rate currently 4.0% unless the consumer chooses another product. The overall cost for comparison is 4.4% APR.

The move follows the launch of its £500 million mortgage fund last month, for lending in Northern Ireland during 2010.

Derek Wilson, the Bank’s Head of Lending Products, says: “We are working hard to further increase our levels of mortgage lending after providing more than £400m last year for homebuyers and home movers, supporting the housing market by providing competitive rates and good service.”

WARNING: YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

“We were delighted to lead the way in 2009 with innovative and unique offerings like our Momentum and Co-Ownership mortgages*. We’d love to see increased customer demand for mortgages in 2010 and have substantial funds ready to help buyers.” Wilson continued.

The bank lent in excess of £400million in new mortgages to Northern Ireland customers in 2009 - a figure which included a 600 per cent increase in lending to the first time buyer market.

Ulster Bank says that statistics from the Council of Mortgage Lenders (CML) ** support its own view that the bank took the largest share of new mortgage business in Northern Ireland in 2009 and accounted for almost half of all lending to the first time buyer market.

But the bank says that it is committed to increasing its level of mortgage lending still further and wants to see more demand from all types of mortgage seekers, including first time buyers, movers and those trading up if it is to meet the £500million commitment.

The new rates are launched today and are available through the bank’s branch network across Northern Ireland.

Lending criteria, terms and conditions apply and Security & insurance are required. Over 18s only. Arrangement fees may apply. Early repayment charge of 3% of outstanding balance is charged if the mortgage is repaid in part or full before end of fixed or discounted period.

* Co-Ownership Mortgage and Momentum Mortgage

Co-Ownership Mortgage
The Customer only has to provide a deposit (5%) if the Ulster Bank mortgage is greater than 75%. The Customer can borrow between 50% and 90% LTV with Ulster Bank, subject to affordability. Co-Ownership can provide between 10% and 50% LTV in steps of 5%. The customer then pays this back to Co-ownership through a discounted rent. If the customer wishes to provide a deposit, this will be taken off the Bank's portion. There is no limit to the amount of the deposit provided. It is not restricted to new developments. The customer can choose any house up to a maximum value of £175k. N.B Before applying for an Ulster Bank mortgage the customer must have been accepted for their Co-Ownership loan and have received a letter of offer. First time buyers only and residents in Northern Ireland.

Momentum Mortgage
Customer does not have to raise a deposit as the developer contributes the 5% deposit. Customer is protected as the deposit is only repaid if the property value rises by 5% or more after 5 years. Customer is also reassured by the fact that we’ll even reduce their mortgage after 5 years by up to a further 10% if the value of their property falls. Available in conjunction with a number of leading developers in Northern Ireland. Customer is able to apply for a 95% LTV Mortgage. First time buyers only and residents in Northern Ireland. Available with participating developments only.

** Source: CML/BankSearch Regulated Mortgage Survey