‘Mortgage Plus’ will be available fixed at 5.89 per cent or tracking at Bank Base Rate plus 1.14 per cent, for two or three years. There will be a maximum combined loan-to-value of 125 per cent – 95 per cent secured on the property and 30 per cent or £30,000, whichever is lower, as an unsecured loan. A minimum deposit of 5 per cent is required.
BM said only those with good credit histories would qualify and predicted over half of all applicants would be declined.
Claire Mortimer, senior press officer at BM, said: “This market has previously had very little competition, so we are bringing in choice. It is not right for everyone and we expect a significant proportion of customers to be previous homeowners.”
James Cotton, mortgage specialist for London & Country, added: “BM is being strict on criteria. All customers will have to have advice first, so it’s going about it the right way.”
Brian Giles, communications director at Northern Rock, said: “It looks to be a niche product which will target a certain section of the market. But we don’t see it as having a big impact on our lending.”
