Hanley Economic Building Society has launched a new mortgage for homeowners improving rather than moving.

The new Home Renovation Mortgage replaces the lender’s previous Light Refurbishment Mortgage and offers terms designed specifically for cosmetic home improvements.

It has a two-year initial variable discounted rate of 5.64%, representing a 2.85% discount from Hanley’s existing standard variable rate of 8.49%. 

It’s available up to 80% loan-to-value and is open to both homebuyers and remortgaging customers. During the initial term, repayments are interest-only, reverting to capital and interest thereafter.

Loans will range from from £30,000 to £750,000 at 80% LTV, rising to £1m at 70% LTV, £1.5m at 65% LTV, and culminating with £2m at 50% LTV. 

There’s an application fee of £299 and an arrangement fee of £999 but no early repayment charges.

To enhance protection over the duration of the renovation work, the mortgage product includes Buildout Indemnity Cover at no extra cost. 

David Lownds, head of products and marketing at Hanley Economic, says: “We’ve introduced the Home Renovation Mortgage to better reflect the needs of the modern borrower. With more people choosing to renovate and enhance their homes, this product provides a flexible and cost-effective way to finance these improvements.

“This has been designed with simplicity and accessibility in mind, helping borrowers to achieve their design and lifestyle goals while still benefiting from our manual approach to underwriting and the personalised service we pride ourselves on.”

The mortgage is open to residential properties across England, Wales and Scotland. Properties in the Scottish Islands may also be eligible on a referral basis.