The pension backed secured loan will also allow the borrowers to obtain loans of between £10,000 and £75,000, with a starting rate of 9.9%.
Distributed solely through brokers, the loan is available to borrowers with a good credit history and who have a self-invested personal pension (SIPP) or SSAS pension. If a borrower does not already have a SIPP, the lender will set one up for them.
Married couples and joint owners of a property will have to become joint borrowers to take out the secured loan.
The lender credit searches all loan applications and said it will take on borrowers who are a “perfectly acceptable risk to manage.”
Tim Moore, MD of Portal Portfolio said the secured lender is also keen to lend to the self-employed with three years of accounts.
“We don’t see why lenders are getting cold feet on the self-employed, but some are because of the conditions attached to their funding. There are a lot of good bets out there – people with a sound history of borrowing – and we don’t see why we shouldn’t lend to them,” he said.
Mortgage brokers who want to recommend the secured loan to customers but are not qualified to offer pension or investment advice, can earn 4% and hand over the regulated aspects to a team of pension IFAs.
Ray Boulger, senior technical manager at John Charcol, said: “The 80% LTV on the loan looks good and the 9.9% rate is very competitive, but in order for Portal Portfolio to do well in this market it needs to keep the rate charge to borrowers the same.”
Comparative secured loan deals in the market include a ten-year fixed rate secured loan from Black Horse at a rate of 10.4%. Blemain Finance is offering 75% LTV for 30 years fixed-term, from a rate of 13.9%.
Initially, the new loans will be distributed through All Types of Mortgages (AToM).
Vic Jannels, group chairman of AToM, said: “The product has a very clearly defined market and will appeal to the tens of thousands of professional people who may have significant sums tied up in both their property and pension schemes.”
