What is Kensington Mortgages?
Kensington Mortgages is a specialist lender that provides residential and buy-to-let mortgages to borrowers who may struggle to secure a loan with mainstream lenders, particularly those with an impaired credit history. It is characterised by the large number of different types of mortgages it offers, which look to serve a wide range of potential borrowers.
It recently hit the headlines with the announcement it was launching a range of long-term fixed-rate mortgages, with up to a 40-year fixed-rate term. This move was in line with products it has launched in the past, which have been innovative and forward-thinking. It won Best Specialist Lender at the What Mortgage Awards 2022.
While the level of choice and the generosity of its lending criteria are attractive, the interest rates for most of its products are significantly higher than for prime mortgages from high-street lenders. The fees can also be relatively high.
It is also worth noting that customers can’t apply for a mortgage directly with Kensington Mortgages as it is an intermediary-only lender. This means you have to use a mortgage broker to be able to access the range. We rate online broker Habito*, which offers independent whole-of-market advice.
Kensington Mortgages key features
- Specialist lender with mortgages tailored for those with a poor credit history or complicated circumstances
- Residential and buy-to-let mortgages
- One of the first lenders in the market to offer a 40-year fixed-rate deal
- Shared ownership and help-to-buy mortgages, as well as products designed for “heroes”
- Up to 6 times income multiples for borrowers in certain professions
Kensington Mortgages pros and cons
| A wide selection of mortgages to suit a broad range of borrowers
Individuals who may have been turned down for a mortgage elsewhere may be approved, particularly as it has a manual rather than automated underwriting process
People in certain professions can borrow up to 6 times their annual income
For those looking for certainty over their monthly repayment and don't want to have to frequently remortgage, it is possible to fix your mortgage for up to 40 years
| The interest rates are typically higher than you would pay for a mainstream mortgage
It only offers fixed-rate deals rather than tracker or variable rate products
The Flexi Fixed for Term mortgages, which are fixed for up to 40 years, have a relatively high early repayment charge attached to them
What types of mortgages does Kensington Mortgages offer?
Kensington Mortgages has a range of products for first-time buyers, movers and those remortgaging, all of which are fixed-rate deals. The different types of mortgages include:
- Select - the lightest level of adverse-credit mortgages, for those who are just outside of the mainstream lending criteria from other providers
- Core - for those with slightly worse impaired credit, with more recent defaults, missed payments or CCJs
- Resi 6 - a credit recovery range for people who have had "small credit blips" more than 6 months ago
- eKo - offering £1,000 cashback if you make the home you buy more energy efficient within the first 12 months of ownership
- eKo Reward - £500 cashback for the most energy-efficient, homes
- Hero - for armed forces personnel, firefighters and police officers, NHS clinicians and teachers and lecturers
- Young Professional - up to 6 times income multiples for those in certain professions, including actuaries, barristers, chartered accountants, commercial pilots, dentists, doctors and solicitors aged up 40
- Large loans - up to £2m
- Income recovery - for self-employed applicants whose income has dipped in 2020/21
- Self-employed - including people with only one year of accounts
- Shared Ownership and Help to Buy - for those looking to participate in these government schemes
- Assisted Deposit - for those using gifted deposits, equity loans to purchase
- Right to Buy - up to £500,000 if people buying their council home
- Property Plus - for homes of non-standard construction
- Flexi Fixed for Term - fixed-rate mortgages of between 11-40 years
What types of bad credit does Kensington Mortgages accept?
As a specialist lender, Kensington Mortgages will consider applicants with less-than-perfect credit histories. It has three main levels of adverse credit criteria, ranging from "Select", which is for people who have black marks that generally happened more than 3 years ago, to "Core" for people with more recent events such as defaults or CCJs, through to "Resi 6" for those with "blips" in the past 6 months.
Kensington Mortgages adverse credit lending criteria
|Criteria||Select||Core||Resi 6||Core, Specialist, eKo Buy-to-Let|
|Defaults||If older than 36 months (no limit on number or value)||If older than 24 months (no limit on number or value)||0 in 6 months 1 in last 24 months (up to £1,500)||If older than 24 months (no limit on number or value)|
|Secured loan arrears||If older than 36 months||If older than 24 months||0 in 3 months Worst status 1 in 24 months||If older than 24 months|
|CCJs||If older than 36 months (72 months for 95% LTV products)
No limit on number or value
|If older than 24 months
No limit on number or value
|0 in 6 months, 1 in last 24 months
Max of £1,000
|Older than 24 months (no limit on number or value)|
|Unsecured credit arrears (if accounts now up to date)||2 in last 12 months||2 in last 12 months||Last 6 months of payments must have been made||2 in last 12 months|
|Debt Management Plans (DMPs)||If track record of 12 months||If track record of 12 months||If track record of 12 months||If track record of 12 months|
|No payday loans within the last||12 months||12 months||6 months||12 months|
How much can I borrow with Kensington Mortgages?
Since the Mortgage Market Review in 2014, lenders have had to determine how much they are willing to lend to someone based on affordability, taking into consideration their existing financial commitments and whether the loan would still be affordable if interest rates were to rise significantly. As such, Kensington Mortgages also uses affordability as the basis for its loan sizes, although unlike many lenders it doesn't have a minimum income requirement (with the exception of its Young Professional range).
There are separate criteria for the Hero range and Young Professional range, where people can borrow up to 5 times or 6 times their annual income, respectively. Additionally, the Flexi Fixed for Term range offers greater borrowing power as affordability is based on the initial rate rather than being stress tested for potential future rates.
What interest rates does Kensington Mortgages charge?
Although mortgage rates are subject to change, generally you can expect to pay significantly more for a deal from Kensington Mortgages. This is mainly because the lender charges more to protect itself from the increased risk posed by someone who has struggled to manage their finances successfully in the past. At the time of writing, the following interest rates were available across the various ranges for 2-year fixed rate deals at 75% LTV:
- Select - 6.20% (£999 completion fee)
- eKo - 6.34% (no completion fee)
- eKo Reward - 6.34% (no completion fee)
- Hero - 6.10% (£999 completion fee)
- Young Professional - 6.14% (£999 completion fee)
- Core - 6.39% (£999 completion fee)
- Property Plus - 6.59% (£999 completion fee)
- Resi 6 - 7.14% (£999 completion fee)
The following products are not offered with a 2-year fixed rate but the 5-year fixed rates are:
- Income Recovery - 6.65% (£999 completion fee)
How long does it take to get a mortgage offer from Kensington Mortgages?
The turnaround time from making your application to getting a mortgage offer will vary greatly depending on factors such as the time of year and generally how busy the lender is. At the time of writing, it states it reviews all new applications within 1 day, assesses uploaded documents within 1 day and completes the whole process from application to offer in 16 working days.
What fees does Kensington Mortgages charge?
There are a number of different charges you can expect to pay when you take out a Kensington Mortgages product. The main fee directly linked to the mortgage itself is the product fee - also known as the completion fee - which is payable once the mortgage has been taken out. Across the Kensington Mortgages range, there is often the option to pay a lower - or even no - fee in exchange for a slightly higher overall interest rate. The highest product fee is £1,999, which can be paid upfront or added to the mortgage total.
In addition to the product fee, buyers may also have to pay for a mortgage valuation, which varies depending on the asking price for the property. A standard valuation starts at £175 for a property under £100,000, rising to £355 for a property between £400,000-£500,000, with the highest amount at £2,860 for a property worth between £4m-£5m.
Can you make overpayments on your Kensington Mortgages mortgage?
While it is possible to overpay your mortgage with Kensington Mortgages, it varies from product to product how much you can overpay before incurring an early repayment charge. As such, it is a good idea to check with an adviser before opting to make an overpayment, either as a lump sum or in regular instalments.
If you do exceed the amount permitted, the early repayment charges are as follows:
Kensington Mortgages early repayment charges
|Term||Year 1||Year 2||Year 3||Year 4||Year 5||Year 6-10|
|1-year fixed rate||3%|
|2-year fixed rate||3%||2%|
|3-year fixed rate||3%||2%||1%|
|4-year fixed rate||4%||3%||1.5%||1%|
|5-year fixed rate||4%||3%||1.5%||1%||1%|
|5-year fixed Income Recovery||4%||3%||1.5%||0%||0%||0%|
|10-year fixed rate||4%||3%||1.5%||1%||1%||0%|
What is the maximum term with Kensington Mortgages?
The longest possible mortgage term with Kensington Mortgages is 40 years. However, the maximum age at the end of the mortgage term is 70, which means you would need to take out the mortgage at the age of 30 to be able to get the full maximum term.
What credit reference agency does Kensington Mortgages use?
In the case of Kensington Mortgages, it predominantly uses Equifax for its credit checks. You can check your Equifax score and report for free with ClearScore, giving you the opportunity to identify any errors or out-of-date entries and maximise your credit rating.
When you apply for a mortgage or other credit product, the lender will run a search on your credit file with one or more of the main credit reference agencies: Experian, Equifax or TransUnion. This search will give them an insight into your past financial behaviour, including any negative events, such as late or missed payments, exceeding your credit limit or being subject to a CCJ or bankruptcy. Based on this information, the lender will decide if you meet its lending criteria, how much they are willing to lend and at what rate.
Kensington Mortgages customer reviews
According to independent customer review site Trustpilot, Kensington Mortgages scores 4.5 out of 5.0 based on almost 3,215 reviews. Overall, 72% of respondents thought the company was "excellent", with only 9% deeming it to be "bad". The positive reviews focused on good service and communication, as well as the fast turnaround time. Meanwhile, the negative reviews were also generally about customer service, although several reviewers complained about the high-interest rates.
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