Capital Home Loans has launched what it believes to be the market's cheapest self-cert tracker in a move to build itself a larger stake in the self-employed market.
The tracker has been pegged to Bank base rate plus 0.74% until June 1 2007, giving it a current rate of 4.74%, to woo more self-cert customers, taking on the likes of BM Solutions.
In line with CHL's long-standing policy the product is limited to the self- employed. The lender avoids offering self-cert products to employed borrowers saying such products are designed specifically to fit the financial circumstances of the self-employed.
Borrowers can pay off 20% of the original loan per year without charge and no MIG is payable. The tracker has a maximum LTV of 90% on self-cert loans up to £500,000. For first-time buyers, a maximum LTV of 85% to £200,000 is available. The arrangement fee stands at £350.
An uncapped procuration fee of 0.5% is payable. There is also a 5% redemption penalty during the term of the tracker but no extended tie-in.
Trevor Child, senior marketing manager at CHL, says: “This product signifies our intention to become as major a player in the self-cert market with the likes of BM Solutions. But whereas BMS has tried to cut packagers out of the loop we take a lot of our business from packagers.
“This is the best Bank base tracker we have offered but, at this rate, we can only offer it for a limited period.”
Rod Murdison, proprietor of London-based Murdison & Browning, says: “This sounds like a strong product. CHL often gets beaten by other lenders on rates or the fact that other lenders will fast-track cases but this deal might turn this around – especially as there is no 1% arrangement fee which is often attached to these types of products.”