Brokers hail UTB's 0.69% bridging rate

United Trust Bank (UTB) has experienced a positive industry response to its new bridging rates of 0.69 per cent, announced earlier this week.

UTB announced on Monday it had dramatically reduced interest rates on short term secured loans. The reduction intended to provide brokers with more flexibility to finance a wider variety of cases.

In response to the rate change, Kit Thompson, Head of Bridging and Commercial at Brightstar Financial, said: "UTB's recent rate reductions show a genuine appetite for them to gain a greater market share. Rates as low as these cannot be ignored, especially for those clients involved in regulated transactions where the broker has an obligation to recommend a lender that will save the clients money, when compared to alternative options.

“This coupled with UTB charging daily interest and allowing interest to be rolled-up and compounded rather than retained at outset, makes it a very attractive proposition and demonstrates their commitment to intermediaries, clients and the sector as a whole."

In immediate response to the rates, Brightstar Bridging took to Twitter, messaging: “Absolutely stonking rate reduction from one of our key bridging lenders today.”

Russell Martin, Managing Director of Finance 4 Business, said: “The rate reduction is a sign of the times, the competition for the prime low LTV loans is fierce. The new pricing announced by UTB demonstrates that their cost of funds is low and many lenders will not be able to compete against their headline rates.

“I would expect that many brokers, particularly for the larger prime deals, will look to utilise this pricing in order to secure a deal for their client that others cannot beat.”

Vic Jannels, Group Executive Chairman of All Types Of Mortgages Ltd (AToM) said the slashed rates are a sign of things to come: that firms and their backers are realising their products need to remain topical.

He said: “Do I suspect other lenders will follow suit? Yes, or they will adapt their existing terms to be more competitive.”

When it comes to the interests of the consumer, Vic said: “Bridging is an expensive exercise. Anything that reduces this has got to be good news.” He added: “Anything that reduces the end figure will increase the volume of lending.”

Chris Fairfax, Managing Director of Positive Lending, held a similar view. He said: “We welcome the reduction in interest rates from United Trust and we believe this will stimulate other short-term lenders to review pricing.

“At Positive we determine the best option for a client through total overall cost, not just interest rate. This means we account for all fees and the way in which interest is calculated. Reductions in interest rates will increase conversion and therefore grow lending volumes as more borrowers consider short term loans to be priced at an acceptable level.”

UTB’s trailblazing 0.69 per cent monthly rate is available for first charges secured against residential property with up to 40 per cent LTV. When dealing with interest rates on LTVs of up to 50 per cent or 60 per cent, 0.75 per cent is offered to the former and 0.80 per cent to the latter.