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Product matters

Platform Home Loans&#39 light-averse offering has all the features one would expect in such a mortgage but is probably most suited to discharged bankrupts or borrowers who have been subject to an individual voluntary agreement, since they will least likely be able to obtain a mortgage from a mainstream lender.

Many lenders are more willing to consider modest CCJs and arrears. As a result, there are other products available nearer to high-street rates.

Overall, this is a reasonable deal but certainly not groundbreaking. The margin being charged over Libor and the 1.5 per cent discount are okay but other products offer similar rates on terms which cater for borrowers with a more heavily impaired credit history.

The fixed rate is a welcome option for borrowers still needing to adhere to a budget. But it is roughly 2.25 per cent over the current three-month Libor rate so, given the choice of fixing or taking the 1.5 per cent discount on offer, I would favour the latter as it is likely to be cheaper over the initial one year period.

That said, the light-impaired market is still relatively immature, so any improvements on the products available are welcomed. We will see refinements in this sector, as new entrants from the mainstream market look for a share of this market and existing impaired lenders improve offerings in response to added competition.

It is difficult to measure the suitability of products in this sector because much dep-ends on the degree of adverse credit an applicant has as to whether a particular loan will best fit their circumstances.

David Bitner is mortgage technical manager of the Marketplace at Bradford & Bingley

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