Kensington Mortgages has launched a range of five-year fixes where the rate drops after two years for borrowers who have had a previous credit problem such as a missed bill.

The new Step Down deals have been added to its Resi 6 and Resi 12 ranges – for borrowers who have had a credit blip more than six months ago or more than 12 months ago respectively.

In the Resi 12 range, rates start from 6.67% for the first two years at 75% LTV with a £999 fee.

For the remaining three years of the deal, borrowers pay 5.53%.

In the Resi 6 range, rates start from 6.88% for the first two years at 75% LTV with a £999 fee.

Then for the remaining three years, borrowers pay 5.71%.

The new Step Down deals are available up to 85% LTV.

Kensington says a borrower taking a £200,000 loan at 75% LTV with a 30-year term to buy a £300,000 home could save £3,587 over five years with one of the new Resi 6 Step Down products compared to the cost of the same deal in the standard Resi 6 range.

The lender will also consider borrowers with county court judgements, defaults, payday loans, debt management plans and credit arrears.

Chief commercial officer Vicki Harris says: “We are excited to be introducing our new Step Down range, which we hope will provide a wider set of options for borrowers who have previously experienced a credit blip.

“Clients have an opportunity to make significant savings in comparison to a standard five-year fixed rate while also benefiting from the additional certainty afforded by access to a lower rate after the first two years.”