Innovative lenders in 2024

Interbridge’s recent entry into the regulated mortgage space is set to revolutionise the sector. Bursting into the second charge market with remarkable impact, Interbridge is on track to become the leading lender in this specialised financial services niche. Their inclusive criteria, which accommodates high loan-to-value ratios and is lenient, yet fair with credit status acceptance, sets them apart. 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, poised to assist countless individuals with their funding needs. Exciting times ahead.

As a broker, it is all about having as many tools in your armoury as possible that could enable your clients to get the exact product that is right for them. We have had the same deals and product set for years now and with the changing nature of work and consumer trends we should be looking at a fresh set of products. Kudos does go to new lenders such as MPowered Mortgages, who are developing technology that works in a way to speed up the mortgage process, and Gen H who utilise technology to really help first-time buyers. Lenders such as Skipton BS with their 100% Track Record product and Accord with their 5% deposit mortgage are also making an effort to be different. The biggest change may yet come in the long-term fixed market with newcomers Perenna and April Mortgages offering a new type of flexible long-term fixed that answers many of the previous criticisms of long-term fixed mortgages. In order to innovate more, lenders do need backing from regulators and Government.

We like the 5-year fixed deals from Virgin, which have a 2-year early repayment charge period. This gives clients great flexibility to have certainty of what they'll pay over 5 years, with the benefit of an easy exit after two years should rates elsewhere be sufficiently lower.

The biggest innovations have come from challenger lenders such as 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. What remains to be seen is the level of the impact on the market from the challengers, especially as rates start to drop.

In the main, the innovation out there seems to come from relatively young lenders such as April Mortgages, Gen H and Livemore. They are showing the older "should-do-better" lenders how it can be done in a market that is rapidly changing. Generous loans and flexibility around income sources and applicants' financial backgrounds need much more focus from the Big Six lenders if consumers are to benefit and borrowers feel a real difference.

Most of the innovation and product choice over the past year or two is coming from smaller, often newer lenders, such as April Mortgages and Gen H. However, mainstream lenders are improving their proposition to offer innovative products, too. 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. 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 profit. Big lenders aren't as agile as smaller ones but they're starting to respond.