Pepper Homeloans, the specialist lender, has launched a range of five-year residential fixed rates for borrowers who have previous blips on their credit rating within the last two years.
The five-year fixed rate deal starts from just 4.13 per cent, is available up to 85 per cent loan-to-value (LTV) and has early repayment charges (ERCs) of just 3 per cent, 2 per cent and 1 per cent in years one to three and 0.5 per cent in years four and five.
Free legals are available on remortgages and there is a fixed fee of £1,495 on all loans.
Jeff Knight, head of marketing at Pepper, said: “We believe these five-year fixed rates are uniquely positioned in the market.
“The rates are the same rates as our equivalent two-year fixes and the reducing ERCs provide greater flexibility for the borrower.
“These additions to our product range will provide greater choice to borrowers at a time when, according to our research, intermediaries are experiencing an increase in enquiries from clients with previous blips on their credit ratings.”
David Hollingworth, associate director of communications at L&C Mortgages, said whilst there is rightly a lot of focus on the ultra low mainstream rates in the market they won’t be right for everyone.
He said: “Although lenders are keen to do business, borrowers that do have some blips on their credit profile will still often find that mainstream lenders will be unable to help.
“However the increased number of specialist lenders offers an alternative for those that have had some issues.
"Lenders like Pepper can therefore offer a lifeline to those that have suffered some adverse credit but are on the road to recovery and able to take on a mortgage to build a good track record and ultimately open up their mainstream options.
“A five-year rate could appeal to those borrowers that want to be sure of where they stand and give them the ability to budget over the medium term.
“Of course they will need to balance how long to lock-in for against their potential to secure a mainstream mortgage earlier but that will depend on their individual circumstances and the severity of their payment history.”
