The product gives borrowers two options, one with a lower initial rate and a higher reversion rate to enhance borrowing power and affordability at the point of application. The other has a higher initial rate and lower reversion rate to reduce ongoing costs once the fixed period ends.
Pepper said both are priced at either side of the core range reversion rate, which currently ranges from 3.9% to 4.4%.
The lender said this would also help borrowers who want the security of a shorter fixed term while they build their credit profile, without having to choose a product that fails affordability today or costs more than needed over the long term.
Paul Adams, sales director at Pepper Money, said: “Affordability is still one of the biggest challenges brokers are navigating for their customers, especially when rates are moving as quickly as they have been.
“Often, two-year affordability can be difficult to make work. But at the same time, a lot of customers don’t want to lock in for longer when they’re unsure where rates will go. This limited-edition product gives brokers a way to structure cases that work for the customer today and doesn’t leave them worse off when they come to revert.”
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Pepper Money makes resi and BTL rate cuts
Pepper Money has also reduced rates by up to 0.8% across its Pepper 48 and Pepper 48 Light residential ranges on two- and five-year fixes.
This includes cuts of 0.8% on its two-year rates at 90% loan to value (LTV), which are now priced at 6.99% and 6.94% respectively.
Across the five-year range, reductions of up to 0.32% have been made.
Its BTL and limited company BTL rates have also lowered and now start from 4.64%. These changes follow the lender’s recent re-entry into the BTL market.
Adams said: “The reductions across our Pepper 48 and Pepper 48 Light ranges reflect our continued focus on giving brokers more choice. These are products for customers who are one step away from the high street, and the right rate can make a real difference to whether a case gets done.”
