Metro Bank Launches Into Near Prime Mortgages and Bolsters Its Specialist Range

• The bank’s near prime mortgages offer a lifeline for often overlooked borrowers with adverse credit history or a lack of available credit
• More than eight in 10 people (81%) with adverse credit history believe that banks and other lenders aren’t interested in helping them
• This forms part of the bank’s ongoing plan to become the UK’s leading specialist lender

Metro Bank has launched into near prime residential mortgages, offering greater flexibility for borrowers who may be struggling to get a mortgage elsewhere.

The bank is now the sole high street lender offering near prime mortgages, despite data from PWC suggesting there could be up to 14 million people in the UK with less than perfect credit history¹.

Metro Bank has also conducted new research, in partnership with YouGov², which reveals that more than eight in 10 people (81%) with adverse credit history agree that banks and other lenders aren’t interested in helping people like them. This rose to nine in 10 (90%) amongst those aged 45-54.

The research discovered that more than four in 10 (41%) of the respondents agree that they have been prevented from getting a mortgage or remortgage as a result of their poor credit history. A similar amount (43%) of people are worried that their mortgage lender options are limited and they won’t be able to access a mortgage or remortgage their current home, due to their credit history.

Metro Bank’s near prime offering sits alongside its core range of residential mortgages, and enables borrowers with an imperfect credit history to purchase a new property or re-mortgage an existing property, at up to 80% loan-to-value (LTV). The new range will accept applicants with lower than average credit scores and those who’ve had unsatisfied county court judgements (CCJs) and defaults, with no requirement for these to be repaid before the end of the loan term. The bank has also confirmed that it will accept unsatisfied defaults of up to £1,000, an increase from £500.

This follows off the back of Metro Bank reducing rates and increasing maximum loan sizes on its 85% and 90% LTV mortgages in February, whilst in November 2020 the bank enhanced its criteria for buy-to-let (BTL) lending.

Charles Morley, Director of Mortgage Distribution at Metro Bank, comments: “It’s been an exciting few months for the Mortgages team at Metro Bank. We’ve enhanced our criteria for BTL lending, cut rates on our higher LTV products and added significant expertise to our team with a number of new hires. This all serves a purpose: to grow into the UK’s number one specialist lender. We’re continuing to make tangible progress, and we’re thrilled to offer this latest near prime offering to customers who may have been overlooked by the vast majority of the market.”

Today’s announcement is in line with the bank’s strategy to meet more customer needs, whilst shifting its asset mix and expanding its lending range. It forms part of the bank’s ongoing focus on balance sheet optimisation in order to drive better risk-adjusted returns on capital.

¹Banking the under-banked: the growing demand for near-prime credit.

²All figures, unless otherwise stated, are from YouGov Plc. Total sample size was 6,791 adults, of which 688 had poor / bad credit history. Fieldwork was undertaken between 12th and 15th January 2021. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).