Royal Bank of Scotland is planning an aggressive attack on the mainstream UK mortgage market with the launch of its First Active brand distributing products solely through intermediaries on June 14.
First Active was founded in 1861 in Ireland as the mutual Workingman's Benefit, changing to First National in 1960 and then converting to a public company in 1988.
It previously entered the UK market in conjunction with Britannic as Britannic Money, but this was bought out by Britannic in 2002.
First Active then merged with Ulster Bank, which was taken over by RBS in January this year.
The company is to launch two new low rate mortgages in England, Scotland and Wales, a two-year discount and a five-year stepped mortgage. Both mortgages will track the Bank of England base rate and it says they will carry competitive proc fees.
The two-year discount offers a rate of 4.04% for two years, 0.21% below Bank base rate. This then moves to Bank base rate plus 0.69%, for the life of the mortgage.
The five-year stepped mortgage starts at 3.14% for the first year, 1.11% below Bank base rate, increasing in steps that track the base rate over the next four years. It then moves to 0.69% above Bank base rate for the life of the mortgage.
Jayne-Anne Gadhia, managing director at First Active, says: “Research shows that intermediaries believe that a discounted initial rate and low long-term rates linked to the Bank of England rate are among the most important interest rate features of a mortgage.
“On top of that, good service is paramount. First Active's first two products offer hugely competitive initial and long term rates backed by a quick and efficient service which will minimise paperwork for intermediaries.”