Specialist mortgage lender Masthaven Finance has applied to become a bank offering home loans and fixed-interest savings.
It has now submitted its banking licence application to the Bank of England following discussions with the Prudential Regulation Authority and the Financial Conduct Authority.
Masthaven said it has already attracted the investment required to meet UK regulatory capital rules and is preparing to launch in the summer of 2016.
It plans tol build on a decade of knowledge in offering specialist mortgages.
Jon Hall, who will lead Masthaven Bank as managing director, said: “This is a hugely exciting time to launch a new retail bank in the UK.
“For too long, savers and borrowers have had to dance to the tune of the big banks.
“The Masthaven approach will be different, recognising that ‘no one size fits all’ and that everyone’s individual financial backgrounds and requirements vary.”
Masthaven said it will offer an individual approach, providing specialist mortgages for UK borrowers who don’t necessarily fit neatly into the “rigid and uncompromising rules of the big, established lenders”.
It also aims to offer a range of competitive online fixed-interest savings products, enabling customers to tailor maturity dates and interest rates to suit them.
Hall added: “When it comes to mortgage lending, we don’t believe in crude tick box or computer electronic score-carding.
“For instance, take a customer who is currently on a very low base rate tracker or fixed rate but who wants to extend their property with a loft conversion.
“To use the equity in their property they may have to refinance away from their low rate.
“Whereas our underwriters will make a lending decision based on each customer’s financial circumstances, along with having a wide range of mortgage options, this means we could potentially lend the cash on a capital and interest basis alongside the existing mortgage.”