Hanley Economic Building Society has launched a new mortgage product aimed at supporting homeowners choosing to improve their existing properties rather than move, in a move that reflects a notable shift in borrower behaviour across the UK.

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

The product features a two-year initial variable discounted rate of 5.64%, representing a 2.85% discount from Hanley Economic’s current standard variable rate of 8.49%. It is 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.

Borrowers can access loans from £30,000 to £750,000 at 80% LTV, rising to £1 million at 70% LTV, £1.5 million at 65% LTV, and up to £2 million at 50% LTV. While the mortgage carries an application fee of £299 and an arrangement fee of £999, there are no early repayment charges.

One of the more distinctive features of the product is the inclusion of Buildout Indemnity Cover, which is provided at no cost to the borrower. It is intended to offer additional protection during the renovation period.

David Lownds, head of products and marketing at Hanley Economic, said the new product had been introduced in response to evolving customer preferences. “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,” he said.

“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.”

Unlike automated credit-assessment processes used by larger lenders, Hanley Economic continues to operate a manual underwriting model, with each application assessed individually by its in-house team. The product does not involve credit scoring, which the society says helps ensure flexibility for a broader range of applicants.

The mortgage is available through Hanley Economic’s branch network and selected intermediary partners, and is open to residential properties across England, Wales and Scotland. Properties in the Scottish Islands may also be eligible on a referral basis.