Tandem Bank has announced it is developing a new type of mortgage product, specifically for first-time buyers.

But instead of telling borrowers what features the mortgage includes, it wants consumers to design it themselves.

In a first for the UK banking industry, Tandem wants aspiring homeowners to help in the design process, sharing their personal ‘must-have features’ for a mortgage by signing up to be a co-creator for the product.

Tandem will feed their input into the design phase of the mortgage, ensuring that the new product meets a real consumer need, before testing it with a small group ready for a full UK launch in 2020.

Ricky Knox, Tandem Bank CEO, said: “We’re turning to our community to shape a new financial product, this time a crowd-designed mortgage. Many people feel like they’re priced out of the housing market or don’t have the credit record to get a favourable mortgage. We plan to address that.”

Fresh approach

Enabled by Open Banking, Tandem is developing a new method of credit scoring based on a customer’s financial data, effectively building a more rounded picture of how they borrow, spend and save through its advanced banking app. This will allow Tandem to offer mortgages to people who might not have been accepted by other lenders.

Knox added: “The mortgage sector in the UK is primed for a shake-up. It’s hard for most people to get on the property ladder and we want to help them embark on that journey with new tech and a customer-first approach to design.”

Tandem is also looking to offer a range of different solutions to assist consumers wanting to get on the property ladder, including Help to Buy and Shared Ownership.