Atom Bank has announced significant cuts to the interest rates of its Near Prime mortgage range. The reductions, which include a drop of up to 0.30 percentage points, span across various products, providing a more affordable path to homeownership for individuals with less-than-perfect credit histories.
The bank’s latest adjustments are most noticeable in its two-year and five-year fixed rate mortgage products. Specifically, the two-year fixed rate mortgages have seen a decrease ranging from 0.10 to 0.30 percentage points. As a result, the starting rate for these loans is now 6.14%. Similarly, the five-year fixed rates have been trimmed down by 0.15 to 0.30 percentage points, bringing the starting rate down to 5.64%.
New Offerings
Alongside the rate cuts, Atom Bank is also broadening its mortgage product lineup with the introduction of a new three-year fixed rate Near Prime range. This new offering starts at a competitive 5.99% interest rate and is available for loans ranging from 60% to 85% loan-to-value (LTV), providing a middle ground for those seeking flexibility between the shorter two-year and longer five-year options.
Behind the Decision
Richard Harrison, the head of mortgages at Atom Bank, expressed enthusiasm about the bank’s latest updates. He noted that the rate reductions and the addition of a new three-year product are responses to the evolving needs of their clients, particularly those whose credit records are not spotless.
Harrison explained, “We are delighted to confirm these rate reductions to our Near Prime range, as well as the launch of a new three-year product to provide further choice. We know that brokers will welcome a wider range of competitively priced products as they cater for those clients who may have the odd black mark in their credit records.”
Addressing Challenges and Improving Technology
Atom Bank acknowledges the financial strains many households have faced in recent years, which have increased the number of borrowers with minor credit issues. In response, the bank has not only adjusted its pricing but also its service model, ensuring that Near Prime borrowers receive the same swift, technology-driven service that its Prime customers enjoy.
Harrison added, “The challenges of recent years have put household budgets under pressure, and will inevitably result in more borrowers with credit blips falling into the near prime category. That’s why Atom bank is committed to delivering not only competitive products for these borrowers but the best possible experience too.”
Leveraging Technology for Efficiency
To streamline the borrowing process, Atom Bank has increased its use of automated technologies, such as Automated Valuations, particularly for Near Prime cases. This approach aims to speed up the application process, ensuring that all customers benefit from efficient, market-leading response times.