A new lender has launched into the UK mortgage market – Octane Capital.

But what makes it stand out from the crowd is the fact that it doesn’t have a list of products for borrowers to browse through.

Instead, the lender creates a deal for individual borrowers, based on their entire application – including deposit, income, credit record and other factors.

It’s a step further than individually underwriting mortgages, where specialist lenders assess if you can borrow, and how much, based on your specific circumstances rather than a computer algorithm.

In the case of Octane Capital, it also decides what deal it is willing to give you at what rate.

Specialist lending

Octane will operate in the specialist mortgage lending market, dealing predominantly in short-term buy-to-let deals and bridging finance, so it’s not going to be suitable for first-time buyers or those looking to switch and save money on their mortgage.

The property lender will price its loans according to risk, not loan to value, and said its new approach means that someone with a 30% deposit could end up with a cheaper deal than someone with 40% upfront.

Each loan will be priced according to the ‘real’ risk it represents once underwritten.

Jonathan Samuels, CEO,of Octane Capital, said: “Charging someone X% if they have a 30% deposit and Y% if they provide a 40% deposit is often misguided, as the borrower with the smaller deposit can be less of a risk once you drill down into the detail.

“As a result, we’ve decided to launch without a set product sheet with a list of rates based on loan to value. Instead, each loan will be priced according to its level of risk. This new blank canvas approach has left some people scratching their heads, but for us it’s a far more sensible way to offer loans.”