Smaller mortgage lenders have been praised by brokers for providing “innovation” in the sector.
Brokers have shared their thoughts on which lenders are providing the most innovation in their experience and why.
Charwin mortgages director at Ranald Mitchell, singled out Interbridge, saying the firm's recent entry into the regulated mortgage space is “set to revolutionise” the sector.
“Their inclusive criteria, which accommodates high loan-to-value ratios and is lenient, yet fair with credit status acceptance, sets them apart,” he said.
“Coupled with innovative technology, they’re aiming to achieve a remarkable 24-hour application-to-completion timeline for a good proportion of their cases.
“Interbridge isn’t just stepping into the market; they’re introducing a fresh dynamic [approach], poised to assist countless individuals with their funding needs.”
While Yellow Brick Mortgages managing director, Stephen Perkins, said the biggest innovations have come from challenger lenders, singling out Mpowered, GenH and April Mortgages.
“Most establishment lenders have made tweaks to criteria and affordability alongside rates to attract business, but generally they are happy with the status quo,” he explained.
“What remains to be seen is the level of the impact on the market from the challengers, especially as rates start to drop.”
Gen H and April Mortgages were also identified by Katy Eatenton as being particularly innovative.
However, she added mainstream lenders are also improving their proposition to offer innovative products.
“For example, Virgin now have a home improvement product that allows you to borrow extra funds to make green improvements to the property but without affecting your LTV limits,” she said.
“Others like Skipton will allow you to choose how you want income calculated for self-employed company directors, namely salary and dividends or salary plus share of the profit.
However, Eatenton added that big lenders “aren’t as agile” as smaller ones but, at least, they’re “starting to respond”.
Fairview Financial Management director and chartered financial planner, Ross Lacey, chose to single out a larger lender as deserving praise.
“We like the 5-year fixed deals from Virgin, which have a 2-year early repayment charge period,” he said.
“This gives clients great flexibility to have certainty of what they’ll pay over five years, with the benefit of an easy exit after two years should rates elsewhere be sufficiently lower.”
Thanks to the Newspage community for sharing their thoughts with FTAdviser.
tom.dunstan@ft.com
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