The majority of the funding was provided by Conister Bank.
Proportunity aims to help buyers with a five per cent deposit get on to the property ladder by providing a loan towards a proportion of a property, similar to the Help to Buy scheme.
The firm gives homebuyers an equity loan of up to £90,000 with rates starting at 6.99 per cent depending on buyer circumstances and the property being purchased. The rate is fixed for five years and the loan term will match the mortgage taken out against the property.
Proportunity requires a broker to advise on the loan, which is repaid monthly on an interest-only basis. The broker is also expected to arrange a plan with the borrower to repay the loan, which is linked to the proportion of the house price borrowed, within five years.
When the borrower is ready to make repayments on the loan, the property will be revalued and the loan will be repriced according to any fluctuations in value.
The firm said it paid brokers a “competitive” procuration fee and aimed to minimise workload by ensuring brokers did not duplicate the fact find process required for a Proportunity loan when sourcing a mortgage.
A first charge mortgage is then sourced from a mainstream bank or building society for the remaining value of the property at a lower loan to value (LTV) tier than the borrower would have originally been eligible for.
As the firm’s average loan is £51,000 and repayments are typically £360 each month, Proportunity claimed using a loan to increase the deposit would not significantly impact borrowing ability.
Proportunity lends to first-time buyers and second steppers with a five per cent deposit and minimum income of £30,000 for single applicants and £45,000 for joint applicants.
The loan can be used on any property across England and Wales but is not available for buy to let or shared ownership borrowing.
Proportunity also takes out a second charge mortgage on the property as security in case the borrower defaults on the loan.
The firm has helped to finance £22m worth of properties since it began lending in 2018.
Vadim Toader, CEO and co-founder of Proportunity, said: “When the pandemic hit, we were able to leverage our property market technology to quickly adapt lending decisions, increasing our portfolio’s resilience and continuing to issue loans, where other lenders were forced to pull back mortgage products or put lending on hold entirely.
“That’s made us the only five per cent LTV lender in the UK. Our number of loans has since grown exponentially, and we’re expecting to double our lending book every quarter for the next six months.”
“I want to personally thank Conister and its team for believing in us. Without them, this would not be possible,” he added.
Lockdown growth
As lenders withdrew from the high LTV market at the start of the pandemic, Proportunity said many of its recent enquiries were coming from brokers who were looking for alternative sourcing solutions for buyers resulting in the onboarding of 200 intermediaries in the last quarter.
As a response, the firm has launched an intermediaries platform.
Additionally, it had to implement a waitlist and introduce a cap of £90,000 on newly issued loans. It also recently hired Marita Cavalcanti, former director at OakNorth Bank, as its chief financial officer.
Stefan Boronea, chief technology officer and co-founder of Proportunity, added: “This year we spent significant time listening to feedback, fully digitalising and automating the Proportunity Loan application process. This will help us better serve our existing intermediaries by underwriting new loans at a much faster pace.
“It will also enable us to onboard new partners quicker. In 2020 we’ve faced unprecedented platform usage – automating the entire process was essential to streamline growing demand in the new year.”
