The lender, which opens for business today, will initially offer buy-to-let mortgages. The move comes hot on the heels of Kensington’s foray into buy-to-let last week, giving the sector a welcome boost.
Precise Mortgages will focus on high-quality loans and prime customers, and offer up to 75% LTV. It has secured funding from Exact investor Elliott Associates.
Alan Cleary, managing director of Precise Mortgages, hopes the launch will help plug the £300bn funding gap in the mortgage market.
He says: “Every pound we lend is a new pound that didn’t exist before we lent it, which is good for all of us, It’s good for the market and helps borrowers and broker.”
The lender may also look at other lending in the future.
Cleary says: “We are constantly reviewing our business model and looking for opportunities.”
The new lender will not affect the mortgage service business of Exact. Cleary says the team’s work at Exact has helped it understand the market.
He says: “Over the past two years we’ve been watching the market closely and seen how conditions have changed on the ground. We have developed an insight into the mortgage credit risk following the credit crunch, and the foundations of Precise Mortgages are built on this.”
The lender’s distribution will initially be limited to Legal & General, Mortgage Intelligence and Mortgage Next. Its products include a deal at LIBOR plus 5.25% for the life of the loan, with an initial rate of 5.89%, a fee of 3% and early repayment charges of 3% for 36 months.
It is also offering a two-year product at LIBOR plus 5.15%, with an initial rate of 5.79%, a 2.50% fee and 3% ERCs for 24 months, and a two-year LIBOR plus 5.35% deal, with an initial rate of 5.99%, a 2% fee and 3% ERCs for 24 months.
Cleary also promises the lender will not dual price.
He says: “We will be 100% focused on the broker market. There will be no dual pricing or split loyalties.”
Colin Snowdon, chief executive of residential mortgages at Aldermore, which also launches today, says: “Today’s news that the Exact mortgage servicing team is launching a buy-to-let lending business is good news for both brokers and borrowers.
“The buy-to-let sector needs additional funding and the launch of both Aldermore and Precise will be a welcome boost to a sector which has suffered from an undersupply of funding for far too long. My best wishes go Alan Cleary and his team – I have no doubt that both our businesses will help to shape the future of the UK mortgage market.”
See this week’s magazine for the full interview