The lender will create a deal for individual borrowers based on their entire application – including deposit, income, credit record and other factors.
Octane will operate predominantly in short-term buy-to-let deals and bridging finance and will price its loans according to risk, not loan to value.
It said the approach means a borrower with a 30% deposit could end up with a cheaper deal than someone with 40% upfront.
Jonathan Samuels, CEO of Octane Capital, (pictured) said: “Charging someone x% if they have a 30% deposit and y% if they provide a 40% deposit is often misguided, as the borrower with the smaller deposit can be less of a risk once you drill down into the detail.
“As a result, we’ve decided to launch without a set product sheet with a list of rates based on loan to value. Instead, each loan will be priced according to its level of risk. This new blank canvas approach has left some people scratching their heads, but for us it’s a far more sensible way to offer loans.”