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.
close

Email a Friend

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.

0 comments on “OakNorth launches mortgages for entrepreneurs”

New banks

Radhika Duggal, CMO of community and business development at Chase, talks financial literacy for families

  • Financial literacy is becoming a crucial checkbox to mark for all players in the financial ecosystem.
  • Chase’s CMO of community and business development, Radhika Duggal, recently sat down with Tearsheet to give her thoughts on the topic.
Rivka Abramson | October 22, 2021
New banks

Behind Upgrade’s move to add BNPL capabilities

  • Upgrade is adding BNPL to its personal loans and payment cards, but with a twist.
  • The company also intends to make a push to bring BNPL payments offline and into shops.
Subboh Jaffery | October 08, 2021
New banks

9 insightful things overheard at Tearsheet’s 2021 Convergence Conference

  • Tearsheet's Convergence Conference set the tone on how banks, investment and payment firms, and fintechs are planning their product roadmaps.
  • It's clear that the trend of rebundling the bank will continue, as we see the emergence of super apps.
Tearsheet Editors | September 30, 2021
New banks

‘We’re in a constant beta state’: How Citizens Bank is adapting to the post-Covid needs of young consumers

  • Citizens Bank is targeting a younger demographic of customers with its national, digital offerings.
  • That means rethinking its branch network and upgrading its products and services to match the needs of the modern consumer.
Ismail Umar | September 29, 2021
New banks

Convergence Conference 2021: All session videos

  • Tearsheet's 2021 Convergence Conference looked at how FIs and fintechs are becoming financial super apps.
  • Here are all the session videos from the event.
Shabih Rao | September 27, 2021
More Articles