Legal & General mortgage ditches credit scoring in new approach

Date:Wednesday 21st April 2010
Author: Max Freedman

A new two-year fixed-rate mortgage is being made available to the public by Legal & General with no credit score required and a representative from the firm has lauded this "back to basics" method of lending.

Martyn Smith, head of mortgage products at the organisation, suggested that the deal - which is offered at 3.35 per cent interest - is very competitive and looks at the process of vetting borrowers in a more innovative fashion.

The mortgage is being provided by Hanley Economic Building Society and has a £100 booking fee, £1,399 administration fee and a loan-to-value rate of up to 75 per cent.

"Credit scoring has its place but complex prime cases are not always catered for by this approach. There are many reasons why an otherwise credit-worthy borrower might generate a low credit score," explained Mr Smith.

Last week, Legal & General revealed that it has begun a pilot deal to offer ING Direct mortgages to certain customers.