Standard enters mortgage market

STANDARD CHARTERED Bank, the banking arm of the Standard Life insurance company, is entering the mortgage market next month, writes Clifford German.

It will undercut all the leading banks and building societies by offering variable rate loans at 6.8 per cent, with a further discount of 2 per cent for the first six months.

The new mortgage brand will be called Freestyle. Standard Chartered has set itself an ambitious target of lending more than pounds 1bn in its first year, taking it straight into the leading 10 UK mortgage lenders with 4 per cent of the market.

Freestyle will offer loans of up to 90 per cent of value. Mortgage offers will be based on an assessment of what borrowers can afford rather than fixed multiples of annual incomes.

Among other attractions, customers will be given a verbal decision on how much the bank will lend in a few minutes. There will be no arrangement fees or mortgage indemnity guarantee charges on large loans.

The announcement will wrong-foot the major lenders that reduced their variable rate loans to 7.75 per cent last week.

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