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Exclusive interview: Dutch pension fund-backed longer-term mortgage lender April soft launches

  • 07/02/2024
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A pension and life-fund backed longer-term residential lender, April Mortgages, has soft launched offering trail-fees and no-ERC fixed rates in the intermediary marketplace, Mortgage Solutions reports.

The fixed-term mortgage lender soft launched its remortgage product with adviser networks HLP and Stonebridge at the end of November last year in a bid to convert the market to longer-term, five to 15-year fixed rates.

The lender has plans to widen distribution in due course.

April will offer fixed-rate deals of five, seven, ten, twelve and fifteen years, with rates starting at 4.99 per cent. There are no early repayment charges if someone is moving house or repaying their mortgage.

While it will only lend at up to 85 per cent loan-to-value to begin with, the firm plans to offer mortgages to those with a five  per cent deposit next month as it targets first-time buyers.

The products, developed through research among brokers and consumers, are offered with no early redemption charge (ERC), adviser trail fees and a readiness to reprice rates and the monthly repayment if a property valuation confirms the borrower has reached a lower loan to value (LTV) tier.

The unique proposition is backed by DMFCO, the Dutch asset manager that launched Munt, a lender which became a top five provider within eight years of launch in the Netherlands.

The trail fee model pays a procuration fee of 45 bps and an additional service fee of six bps each year from the fifth anniversary of the client’s mortgage for the duration of the product term. If the client wants a further advance, April will pay a further proc fee of 20 bps on the additional borrowing or an additional product transfer fee if clients choose an April deal at term end, subject to network arrangements.

April pledges it will always refer a customer back to the broker for advice.

It said: “As long as you are available to advise your clients should they need it, we will continue to pay you for your support. This means you’ll be rewarded for building a long-term relationship with April as well as your client. And you can start to build embedded value in your business.”

The lender said it is already in discussions with the next tier of distribution and its product plans include a house purchase offering shortly after launch, widened criteria and a launch into Scotland.

April’s commercial director Tim Hague said: “We are starting slowly but we have very big ambitions.”

In an exclusive interview with Victoria Hartley, contributing editor at Mortgage Solutions, Hague was asked if he hopes the product might establish a trail-fee model in the UK broker market.

He replied: “Imitation is the greatest form of flattery.”



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