New banks

OakNorth launches mortgages for entrepreneurs

  • OakNorth has lent over £3 billion in debt financing to UK entrepreneurs.
  • Now, it will underwrite mortgages for its clients.
OakNorth launches mortgages for entrepreneurs

OakNorth, the UK challenger bank, has launched a new mortgage product aimed at serving individuals with atypical sources of income.

The new mortgage product: The bank is introducing a new variable rate mortgage product targeting individuals with non-uniform sources of income. OakNorth will work with asset-rich/income-poor individuals to build bespoke mortgages starting at £500,000. These loans might not have been funded by traditional mortgage lenders.

The UK mortgage market: The six largest banks in the UK have 77 percent market share of the mortgage market. High street banks have a hard time underwriting people who don’t tick all the boxes on a traditional loan application. OakNorth has made a business out of lending to businesses run by these types of individuals, providing over £3 billion in debt financing to fast-growth businesses and property developers across the UK.

“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,” said Ben Barbanel, head of debt finance at OakNorth.

“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 ten business owners in the UK are unable to access the finance they need to purchase their first home.”

OakNorth’s expansion strategy: OakNorth is focused on growth. The bank believes it can build a mortgage book of £260 million this year. Adding a mortgage product not only fuels expansion, but further locks in its target borrower — the entrepreneur — with additional products. As other challengers face a struggle expanding globally, OakNorth has also split out its technology into a separate unit and will use a licensing strategy to expand globally.

New banks

Dan Ariely on how Qapital uses behavioral finance principles to help people save more

  • Renowned behavioral economist Dan Ariely has spent a career thinking about how to get people to save more.
  • He was recently named chairman of the board of Qapital, a challenger bank.
Zoe Murphy | May 24, 2019
New banks, Podcasts

Behind the scenes of OakNorth’s mortgage product launch with CFO Cristina Alba

  • OakNorth is a UK challenger bank that's really focused on SME lending.
  • The company recently launched a mortgage product aimed at the same entrepreneurs.
Zack Miller | May 23, 2019
New banks, Podcasts

BankMobile’s Luvleen Sidhu on T-Mobile MONEY, banking college students, and leveraging partnerships for growth

  • T-Mobile now offers banking services and a very aggressive interest rate.
  • Through this white label partnership, BankMobile reaches more end customers.
Zoe Murphy | May 21, 2019
New banks, Podcasts

The Challengers 6: OakNorth’s new mortgages — Chase’s banksplaining backlash — N26 goes into Brazil

  • On today's episode, your hosts focus on OakNorth's new mortgage product and Chase's tone deaf Tweet.
  • Banks and fintech apps must do a better job helping customers make better financial decisions.
Tearsheet Editors | May 09, 2019
New banks

Monese tops the 1 million customer mark

  • Monese hits an important milestone half a year after raising its Series B.
  • Importantly, the challenger banks sees people depositing their paychecks into their accounts.
Michael Deleon | May 03, 2019
More Articles