The new bank plans to offer online, fixed-interest savings and specialist mortgages. It says that innovative technology will put savers in control of their own product design.

Masthaven has been offering specialist mortgages such as bridging finance, second charge loans and development finance for the past decade. The planned bank has already attracted the significant investment required to meet UK regulatory capital rules and is preparing to launch in the summer of 2016.

Masthaven Bank managing director Jon Hall said: “This is a hugely exciting time to launch a new retail bank in the UK. For too long, savers and borrowers have had to dance to the tune of the big banks. The Masthaven approach will be different, recognising that ‘no one size fits all’ and that everyone’s individual financial backgrounds and requirements vary.”

From launch, Masthaven Bank will offer a range of online fixed-interest savings products. It will also provide specialist mortgages for UK borrowers who might not be accepted by more established lenders.

“When it comes to mortgage lending, we don’t believe in crude tick box or computer electronic score-carding. For instance, take a customer who is currently on a very low base rate tracker or fixed rate but who wants to extend their property with a loft conversion. To use the equity in their property they may have to refinance away from their low rate,” said Hall, “Whereas our underwriters will make a lending decision based on each customer’s financial circumstances, along with having a wide range of mortgage options, this means we could potentially lend the cash on a capital and interest basis alongside the existing mortgage.”

Kevin Mountford, head of banking at MoneySuperMarket, said the ever increasing number of new entrants in the banking market is good news.

“Competition is already improving and we are seeing a significant increase in the savings rates being offered by these alternative banks. Many UK savers have their money in accounts with average rates less than the Bank of England base rate, but right now they can switch to an account with a higher rate of interest and earn three or four times as much from their money. With Masthaven Finance applying for a banking licence, I’m hopeful we are going to see even more consumer-led products and innovation in the market.

“However, more needs to be done to raise awareness of the alternative players and encourage people to switch to their market leading deals. Whilst we all have better things to do on a Saturday morning, than managing our finances, if we don’t take advantage of these rates, they may simply disappear as competition wanes.”