Platform Home Loans has announced it is to move up the credit spectrum with the launch of a new product range targeting the near-prime market.
Key features of the new Premier Range are 95% LTV for house purchase combined with a competitive starting rate of 2.75% over Libor, only 1% over mainstream lenders’ standard variable rate. Loans up to 90% are available on remortgages and 85% on right-to-buy mortgages.
While the LTV is higher than other loans in Platform’s product range, qualification criteria is tighter. Three county court judgements are permitted to a maximum of £3,000 and one mortgage payment may have been missed as long as it has been cleared within 12 months.
Although the mortgages do carry a redemption fee the penalty is not extreme – 4% interest is charged in the first year, 3% in the second, 2% in the third and 1% thereafter or notice in lieu.
David Tweedy, managing director at Platform Home Loans, said: “We took the view customers come to us with a short-term need, so we do not want to force them to stay with us for longer than necessary.”
Platform sees an opportunity to offer borrowers who fall just short of mainstream lender requirements a more suitable mortgage without forcing them into the sub-prime market.
“We looked at performance of loans in this area and felt it would be beneficial to target customers with a higher credit quality. Even though the LTV is higher and the margin is lower, this represents a better risk as there is less chance of default,” said Tweedy.