The lender said this would give more options to borrowers who have experienced a credit blip. 

It works by giving borrowers a standard fixed rate in the first two years of the initial period, followed by a reduced fixed rate for the remainder of the term. 

The product is available through Kensington Mortgages’ Resi 6 and Resi 12 ranges. 

The Resi 6 criteria is open to borrowers who are looking to move home or remortgage and who have experienced a credit blip over six months ago, while the Resi 12 criteria is open to borrowers who have experienced a credit blip more than 12 months ago.

The Resi 12 Step Down range is also available to first-time buyers. 

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Kensington Mortgages will consider county court judgments (CCJs), defaults, payday loans, debt management plans, and credit arrears. 

 

Potential savings

Within the Resi 12 range, the deal at 75% loan to value (LTV) with a £999 fee starts with a rate of 6.67% then falls to 5.53%. With no fee, the rates are 6.77% and 5.62% respectively. 

For an 80% LTV deal, the rate starts at 6.98% with a £999 fee, then drops to 5.8%. With no fee, this starts at a rate of 7.34% then falls to 6.09%. 

Kensington Mortgages said the range could give borrowers the chance to “potentially make considerable savings” of up to £7,000. 

For example, a borrower buying a property worth £500,000 at 80% LTV with a £400,000 loan on a 40-year term could save £6,943 over five years with Kensington’s Resi 12 Step Down five-year fixed rate. 

Vicki Harris (pictured), chief commercial officer at Kensington Mortgages, said: “We are excited to be introducing our new Step Down range, which we hope will provide a wider set of options for borrowers who have previously experienced a credit blip. Clients have an opportunity to make significant savings in comparison to a standard five-year fixed rate while also benefitting from the additional certainty afforded by access to a lower rate after the first two years.

“This latest range highlights our commitment to developing innovative solutions for our customers while maintaining our dedication to leading broker service and exceptional service times.” 

The launch of this five-year fix follows Kensington Mortgages adding mid-LTV options to its range in June.