Metro Bank launches ‘near-prime’ mortgages

Metro Bank launches ‘near-prime’ mortgages
 Credit: Joe Giddens/PA Wire

Metro Bank has launched ‘near-prime’ residential mortgages as it looks to meet more customer needs.

According to the bank, its near-prime offering enables borrowers with an “imperfect” credit history to purchase a new property, or remortgage an existing one, at up to 80 per cent LTV.

It added that the new range will accept applicants with “lower than average” credit scores and those with unsatisfied county court judgements (CCJs) and defaults, with no requirement for them to be repaid before the end of the loan term.

Unsatisfied defaults of up to £1,000 will also be accepted, up from £500.

Charles Morley, director of mortgage distribution at Metro Bank, said: “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.”

A survey of more than 6,790 adults in January Metro Bank found two in five (41 per cent) agreed they had been “prevented” from getting a mortgage due to their poor credit history.

A similar proportion (43 per cent) were worried their mortgage lender options were limited and that they would not be able to access a mortgage or remortgage their current property due to their credit history.

According to accountancy firm PwC, ‘near-prime’ customers can include those with a thin credit file, mildly adverse credit history such as having missed a small number of payments, or an incomplete credit record such as due to an inconsistent address history.

Metro Bank’s near-prime launch comes after specialist lender Bluestone Mortgages said last year it expected growth in demand for specialist lending to continue over the long-term, given the number of borrowers who could emerge from the pandemic with more complex borrowing needs.

Likewise, Accord Mortgages predicted that standard mortgage cases will be uncommon this year following the financial impact of the coronavirus.

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