BM Solutions is launching Mortgage Plus, a product which connects a secured mortgage and an unsecured personal loan, from Monday November 13.
The product is only available to prospective borrowers with an excellent credit history, through independent, regulated mortgage intermediaries.
Nigel Stockton, managing director of BM Solutions, says: “This specialist product serves a niche part of the market where there has been little competition.
“Nevertheless, this product will be tightly underwritten and will have very demanding credit criteria.”
Because of the stringent credit criteria are in place, more than half of applicants are expected to be declined.
The product will be available as either a fixed or tracker, and all customers will be repaying on a capital and interest repayment method.
It connects a secured mortgage and unsecured personal loan with one monthly payment.
The maximum combined LTV is 125% and this is made up of 95% secured on the property and 30% (or £30,000 whichever is lower) as an unsecured personal loan.
BM Solutions says a significant proportion of customers are expected to be previous homeowners as in all cases a minimum deposit of 5% is required.
Customers are also likely to be in their early 40s, or graduates or professionals with high potential for future income growth.
Stockton adds: “We estimate this is a £10bn market, which represents just 3% of the overall market, so obviously this is a niche area that won’t be suitable for everyone. But this is all about bringing choice to the market, as presently only Northern Rock and the Coventry offer this type of product.”