Magellan cuts sub-prime mortgage rates to 5.42%
The lender, which launched last August, had previously offered each of its products at a rate of 8.55% (LIBOR + 8.00%). It said the changes were due to lower funding costs and to better target the credit repair market.
The 5.42% (LIBOR + 4.90%) product is available up to 60% loan-to-value with other rates available up to 75% LTV.
Mark Snape, lending managing director at Magellan, said the lender would only consider applicants who had suffered a demonstrable ‘one-off’ life event which had caused them financial difficulties.
Borrowers are not allowed to have incurred any new adverse credit within the last 12 months.
“Our range is targeting borrowers who have suffered one-off life events such as redundancy, divorce, or long-term illness which led to financial difficulties,” said Snape.
“However, they have got their finances back on-track and now deserve a second chance,” he added.
“The new lower mortgage rates, along with changes to the way we assess affordability, means that more applicants will now have access to competitively priced mortgage funding. We have also made a number of criteria changes, including raising the maximum LTV to 75% for borrowers in debt management plans and allowing our fees to be added above our maximum LTVs.”