M&S Bank moves into the mortgage market
M&S Bank has launched its first mortgage range, with deals aimed at helping people on to the property ladder – and money being donated to housing charity Shelter for home loans purchased.
The deals include a first-time buyer range, as well as mortgages for home movers and home owners looking to remortgage. Fixed and tracker options will be available.
The bank said it will bring the “M&S-standard service” to its mortgages.
To support people buying their first home, up to four borrowers planning to live in a property will be able to take out a mortgage together.
First-time buyers are also being offered £1,000 cashback as well as a free valuation.
M&S Bank’s first-time buyer range includes two- and five-year fixed-rate and two-year tracker mortgages, from 60%-90% loan-tovalue (LTV), on terms lasting up to 30 years.
Examples include a two-year fixed rate at 2.09% including the £1,000 cashback and free valuation, for someone with a 10% deposit to put down. Borrowers will need to stump up a £995 fee for this deal, although a “fee saver” option with a higher mortgage rate is available.
M&S Bank has also said it will donate £25 to Shelter for every mortgage purchased.
The bank said that, with families often looking to support loved ones financially, it is also offering customers who remortgage with M&S Bank the option to consider additional borrowing at the same rate and term as their M&S Bank mortgage.
This would give them a lump sum which could be “gifted” to someone else to use towards a house deposit.
M&S Bank, which already offers current accounts, credit cards, personal loans and insurance, said its first mortgage range marks a “key step” in its transition from a financial services provider to a full-service bank.
Sue Fox, chief executive of M&S Bank, said: “The launch of an M&S mortgage is a major milestone for M&S Bank and I’m delighted that customers will now be able to get the M&S-standard service they have come to know and expect from M&S Bank when they make the biggest and most important purchase they will ever make – their home.
“With this in mind, we have developed a range of solutions to support first-time buyers and to assist families with their desire to help loved ones make that critical first step on the property ladder.”
Rachel Springall, a finance expert at Moneyfacts.co.uk, described the move as an “exciting launch” from M&S.
She said the ability for up to four borrowers to club together for a mortgage was a “useful feature” and “great news for borrowers struggling to afford their first property”.
She continued: “As with any deal, though, borrowers will be wise to work out the true cost of any deal.”
Ms Springall highlighted possible alternative mortgages, such as a two-year fixed deal from Yorkshire Building Society for borrowers with a 10% deposit at 1.82% with a £995 fee and £250 cashback.
Principality Building Society offers a fee-free two-year fix at 2.7% for borrowers with a 10% deposit, which also has perks including a free valuation.
Finance expert Andrew Hagger, of Moneycomms.co.uk, said: “It’s good to see some extra competition in the residential mortgage space from one of the UK’s biggest brand names.”
Polly Neate, chief executive of Shelter, said the charity is “extremely excited” about the potential to raise significant funds through the move.