OakNorth launches retail mortgage deals for HNWIs

OakNorth is entering the mortgage market with a range of lifetime trackers aimed at high net worth individuals.

The challenger bank is targeting entrepreneurs, SME business owners, and clients with atypical income streams. It says it plans to build its mortgage loan book to £260m this year.

According to figures from the FCA, the six largest banks in the UK dominate 77 per cent of the mortgage market. OakNorth says these banks often find it commercially unviable to create bespoke mortgages for high net worth individuals as they lack the appropriate cost base and expertise to cater to them.

According to OakNorth, individuals with non-uniform or atypical sources of income, or those who are asset-rich but regular income-poor, usually find it difficult to pass the high street banks’ lending criteria. OakNorth says this is because most banks only accept regular and established forms of payments as income. The bank says these individuals require more bespoke lending solutions.

OakNorth has provided more than £3bn in bespoke loans to UK entrepreneurs since its launch in September 2015, and says it has the necessary expertise and tailored credit analysis models to cater to this market niche.

OakNorth has hired three mortgage advisers: Kevin Appleton, Matthew McDonald and Mark Howell.

Appleton joins from the Financial Ombudsman Service. He has also worked as a mortgage broker and spent 18 years with the RBS Group working with ultra-high net worth private clients.

McDonald was previously a broker, and spent 12 years at Coutts & Co. Howell joins from the Bank of Ireland where he was director of marketing and customer management for UK mortgages.

OakNorth head of debt finance Ben Barbanel says: “High street banks have limited mortgage offerings when it comes to borrowers who don’t have a regular or established source of income, such as the self-employed or business owners. Private banks, on the other hand, tend to have high entry requirements that are unfavourable to most of these individuals.

“Lenders are typically unwilling to offer bespoke terms to their mortgage products and as a result, more than one in 10 business owners in the UK are unable to access the finance they need to purchase their first home.

“By leveraging our experience in creating tailored loans for businesses, we can plug this gap and provide our growing portfolio of property investors and developers with mortgage solutions that are attractive, quick, convenient and easy to use.”

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