Residential lending criteria


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Abbey eligibility

Expand Eligibility questions

If you answer yes to any of the questions below, unfortunately we will decline the application.

    1. Are the customer(s) unable to provide written confirmation of all types of income, which will be used in the application?
    2. Is this a Buy To Let application?
    3. Is this a Guarantor application?
    4. Is this a Shared Equity mortgage not offered through the Governments Help to Buy scheme? 
    5. Is this a Low Cost Housing/Restricted Resale Covenant application?
    6. Is the property being purchased by, from or connected to a Property Investment Club?
    7. Are all the customers unemployed?
    8. Are any of the customers under 18?
    9. Will any customer be over the age of 75 at the end of the mortgage term?
    10. Will an occupier who is not an applicant on the new mortgage application be paying a lump sum towards the purchase of the property?
    11. Will the customer or their immediate family live in less than 40% of the property either on completion of the mortgage or at a later time?
    12. Is the customer remortgaging an Alliance & Leicester mortgage to Abbey?
    13. If this a remortgage application, does the customer currently not occupy the property?
    14. Is this a type of property or loan that we do not lend on?

Also, has any customer on the application ever:

    1. Had a property repossessed by a Mortgage lender?
    2. Been Bankrupt or subject to an IVA?
    3. Had a criminal conviction, unless the conviction is for a minor traffic offence, or spent under the Rehabilitation of Offenders Act 1974.?

       

Expand What's changed?

The following sections have been updated recently:

July 2014

Interest only applications
For sale of mortgaged property the minimum equity buffer is now £150,000. 

Maximum age
Where any loan part is on an Interest only basis the mortgage term cannot exceed the applicants 65th birthday.

Lending over 90% LTV
For applications under the Help to Buy: mortgage guarantee scheme, income multiples must be less than 4.5 times income.

New build
Standard new build LTV limit for flats is now 80%.

Maximum term
For mortgages under the Help to Buy: equity loan scheme the maximum term is now 35 years.

Flexible offset
The Flexible Offset mortgage can be ported to a new property but the Sale and Purchase must be simultaneous.

For new Flexible Offset mortgage applications on or after 25 July 2014, drawdowns from available funds may be
assessed for affordability and may only be allowed on a Capital and Interest basis.

Foreign nationals
‘Other foreign nationals’ section updated.

Portability
Where a customer chooses to port their Flexible Offset mortgage to a new property the Sale and Purchase must
be simultaneous. The three month Early Repayment Charge waiver window does not apply (because there is no Early Repayment Charge).

We do not lend on the following types of property
Live/work units and properties with 10 or more acres of land.

May 2014

Lease
Clarification around lease term added: Minimum term at the start of the mortgage is 55 years. There must be at least 30 years remaining on the lease at the expiry of the mortgage term.

All applications are subject to a satisfactory valuation. In some cases where the minimum term is less than 80 years it may be regarded as unacceptably short, and where it affects marketability the lease term will be reflected in the valuation.

Secured commitments
We do not accept new applications if the applicants’ total secured commitments exceed £150,000 at application and
they:

  • Have more than four secured commitments at application, or
  • Will be retaining more than four properties on completion

April 2014

Affordability – income types table
Guaranteed for life DWP benefits added to other primary income (100% of income).

Automated Income Verification (AIV)
New section added.

Benefit solutions & Early Repayment Charges (ERC)
Removal of reference to Homebuyer Plus as no longer available.

Execution Only
New section added. We will accept applications on an Execution Only basis from 26 April 2014 for High Net Worth
customers and Mortgage Professionals.

Fast-Track policy
We no longer accept fast track.

Maximum age
Section updated - for existing Santander mortgage customers moving home who are borrowing the same or less, we may consider applications where the mortgage term currently runs past the applicants’ selected retirement age.
The term exceeding retirement cannot be extended any longer.

January 2014

Higher Lending Charge (HLC)
Updated for Help to Buy: mortgage guarantee – we do not charge a HLC for these cases.

Lending over 90% LTV
Applications above 90% LTV need to meet our Help to Buy: mortgage guarantee eligibility criteria.

Maximum LTV
95% LTV available up to £570,000 for applications under the Help to Buy: mortgage guarantee scheme.

Mortgage Buffer
Exclusions have been updated.

Types and purpose of loans where we lend
Maximum LTVs updated.


For details of our Residential lending criteria changes prior to January 2014 please click here.


Affordability

Expand Affordability

Consideration of any application is primarily based on the customer’s ability to repay the mortgage loan.

Calculation of the amount we will lend to a customer is based on assessing affordability taking account of income, regular commitments and living expenses. 

The affordability calculator is available on our website.

All current credit commitments must be included when assessing affordability, irrespective of whether they are being repaid.

An application will be deemed unaffordable (and will therefore be automatically declined) where either income multiples or levels of unsecured debt are too high.

To ensure a realistic figure is used for affordability purposes, the system will automatically use 100% of primary income and a maximum of 50% of secondary income, to calculate the net monthly income figures.  The table below shows the income types considered.

Primary Income is income that is permanent, monthly, reliable, sustainable and regular.  Secondary Income is income that, whilst not permanent or guaranteed, is nevertheless regular and sustainable.

Please note that applications will be subject to additional policy including maximum income multiples and debt:income ratios.

Income Types

Primary income (100% of income)
Secondary income
(50% of income)
Gross basic Other  
Permanent contract of employment
Fixed term contracts
Short term renewable contracts
Basic salary
Pensions and annuities
Dividends for directors
(>20% shareholding only)
Employed income (Salary) for director
of a limited company
Net profit of a sole trader/partnership
Second job in the same line of work as the primary job
London weighting
Monthly bonus (1)
Monthly overtime (1)
Monthly performance related bonuses (1)
Monthly commission (1)
Large town allowance
Permanent shift allowance
Employer’s mortgage subsidy
Housing allowance
Car allowance
Working tax credit
Child tax credit (2)
Child benefit (2)
Guaranteed for life DWP benefits (2)
Overtime less frequently than monthly
Second job not in the same line as work as the primary job
Bonuses not paid monthly
Performance related bonuses less frequently than monthly
Commissions less frequently than monthly
Discretionary mortgage subsidies
and housing allowances
Investment income
Maintenance payments
State benefits (DWP/HMRC) confirmed as indefinite
Rental income from
mortgage free property
Rental income in excess of 150%
of the mortgage payment
Fostering income
1.  Please refer to Evidence Requirements Guide for further details and requirements. 
2.  Where any applicant’s total gross income is above £50,000, child benefit should not be included as a source of income. Where you are using child benefit and/or child tax credit as other primary income, you need to ensure that the mortgage will remain affordable when the benefits end. You must record this fact in the general notes section within the ‘Regulation’ section in the Full Mortgage Application (FMA) on Introducer Internet. An example of a suitable note from an intermediary would be: ‘I am satisfied that affordability of the mortgage will continue when the benefits end’.

Expand Arrears

Arrears in the previous 12 months are not acceptable.

Expand Bankruptcy

Any customer who has ever been bankrupt will be declined.

 

Expand Credit Score

The following provides examples of the types of application that fall into our credit scores.

Low scoring applications may be declined.

High credit score Low credit score
Not over indebted No existing mortgage
An established clear credit history Little to no credit history
Likely to have a lower LTV Likely to have a high LTV
A well conducted existing mortgage Some adverse credit history
A record on the voters roll No record on the voters roll

Expand Declines

If a Full Mortgage Application has been declined for affordability reasons an appeal will only be considered if the customer has a substantial Santander relationship which should consist of at least one of the following:

  • A Santander UK plc mortgage with no arrears in the last 12 months.
  • A well-conducted Santander UK plc current account that has been operated continually within agreed limits and showing salary credits for a minimum of six months.
  • A Santander UK plc savings account with a balance of at least 3 months net earnings of all customers in the last twelve months.

Expand Expenditure

Regular expenditure items need to be included to assess affordability. To include:

  • Loans and outstanding credit card balances
  • Shared ownership rent
  • Services charges
  • Maintenance
  • Student loans and
  • Cost of investments to be used to repay interest-only loans

Expand Income multiples

All cases are assessed on affordability using the affordability calculator.  Please note that applications will be subject to additional policy including maximum income multiples and debt to income ratios.

 

Expand Proof of deposit

We may request proof of deposit, for example if a First Time Buyer was putting down a large deposit. We always require evidence of the deposit where it is £100,000 or more and is not coming from the simultaneous sale of a borrower’s existing property.

We can accept deposits provided by gift or loan.

We will not accept a gifted deposit if:

  • provided by the vendor (unless an acceptable new build incentive from the builder/developer);
  • protected by a Deed of Trust (or similar);
  • the person providing it will be living in the property, but is not named on the mortgage; or
  • there is a beneficial/equitable ownership/interest in the property.

The use of a second charge could indicate the amount provided is not a gift and further clarification may be required. We do not allow a second charge on any flexible mortgage products.

Where the source of deposit is a loan, you should provide the following details in the notes section on Introducer Internet:

  • amount;
  • lender (explain background if not a financial institution);
  • loan terms (e.g. interest rate, payments required);
  • any security required e.g. second charge; and
  • confirmation that payments have been factored into affordability.

Expand Proof of mortgage payments

Not required unless requested specifically.

Expand Proof of rental payments

Not required unless requested specifically.

Expand Rental property income

 

Acceptable rental income surplus evidenced on existing let properties may be used as secondary income, please see the Retained property section.

 

Expand Secured credit commitments

We do not accept new applications if the applicants total secured commitments exceed £150,000 at application and they:

  • have more than four secured commitments at application, or
  • will be retaining more than four properties on completion.

Expand Self certification

We do not allow self certification of income.


Customer

Expand Applicants

Maximum of two customers per application.

If the application includes a person who is going to be living in the property and they are also providing a lump sum towards the purchase, that person must be included on the application and appear on the mortgage.

If the application includes a person who is 18 and over who is going to be living in the property and is not on the mortgage, it is essential that this person postpones their rights to occupy the property in favour of Abbey by signing a Deed of Consent and Charge, which is on the back of the Mortgage Deed (Standard Security in Scotland).

Where there are two applicants

  • Both primary incomes can be used together with 50% of any secondary income. 

Expand Automated Income Verification (AIV)

AIV is an automated way of verifying income through the Credit Reference Agency (CRA) comparing Current Account
Turnover (CATO) information against an applicants stated income. Where a joint application is submitted, both applicants must be AIP eligible.

This agreement is on the basis that you, the intermediary, are satisfied that the income declared is accurate and that at the time of full case submission you have supporting evidence of net income which meets our requirements.

This information should be retained on file for a minimum of two years from the date of completion.

Our detailed income evidence requirements are set out on www.santanderforintermediaries.co.uk. We reserve the right to request this evidence.

If a case is re-submitted the AIP may result in different evidence requirements.

Maximum LTV 90%.

Help to Buy: equity loan, Help to Buy: mortgage guarantee, Right to buy and shared ownership case types are not eligible for AIV.

Applications that do not meet our eligibility requirements for AIV must have income provided.

 

Expand Conflict of Interest

Intermediaries are required to act appropriately where an application represents a potential conflict of interest situation. This includes dealing with applications in your own name(s) or on behalf of relatives.

For firms where there is no independent person to process the application and validate all necessary documentation, the application will need to be put through another firm.

Expand Contractors

We will consider customers on non-permanent employment contracts.

Expand Criminal record

We do not accept applications from customers with a criminal record (or where they are living with someone who has), unless the conviction is for a minor traffic offence, or is spent under the Rehabilitation of Offenders Act 1974.

Expand Eligibility

Anyone aged 18 years or over at the time of application (subject to status) with three years’ address history.

 

Expand Execution Only (EO)

We will accept applications on an Execution Only basis from 26 April 2014 for High Net Worth customers and Mortgage Professionals.

For an application to be considered on an Execution Only basis the applicants must meet the following criteria: 

  • High Net Worth: one applicant must have an annual net income of no less than £300,000, or net assets of no less than £3,000,000. Joint incomes cannot be summed to meet the eligibility amounts.
  • Mortgage Professionals: must either work or have recently worked in the home finance sector for at least a year, are CeMAP qualified (or equivalent) and understand the risks. For joint applications both applicants must be Mortgage Professionals.

Evidence of eligibility to proceed with Execution Only must be obtained from the customer. We will undertake regular monthly checks with a sample of intermediaries to check that they comply with the above criteria.

Expand Fast track policy

We no longer offer Fast Track.

 

Expand First time buyer

A customer who has never owned a residential property, whether in the UK or abroad. On joint applications all customers must meet the definition

 

Expand Foreign nationals

European Economic Area (EEA) Nationals and Swiss Nationals

The above citizens are treated as UK nationals.

The following countries are members of the European Economic Area (EEA).

Austria Finland Latvia  Portugal
Belgium France  Liechtenstein  Romania
Bulgaria Germany Lithuania  Slovakia
Croatia1 Greece  Luxembourg  Slovenia 
Cyprus Hungary  Malta  Spain
Czech Republic  Iceland Netherlands Sweden 
Denmark  Ireland  Norway   
Estonia  Italy  Poland    

1 Croatian nationals are subject to additional regulations for employment in the UK until at least 30 June 2015

Other Foreign Nationals

We consider applications from non-EEA/non-Swiss nationals where the property is for their own use and for immediate occupation. These may be subject to full underwriting.
 
For applicants whose income is required for affordability purposes:.

  • Where LTV exceeds 75% they must have indefinite rights to reside/work in the UK.

Applications must be supported by the following:

  • Evidence of right to remain in the UK, with no restrictions on employment, proven by:
    • A Visa stamp in a currently valid passport;
    • A United Kingdom Residence Permit or
    • Written confirmation from the Border and Immigration Agency/Home Office
  • If limited bureau data is available, three months bank statements
  • The customer must have been resident and working in the UK for a minimum of 12 months

Expand Guarantors

We do not accept guarantor applications.

Expand Identification

A Confirmation of Verification of Identity Certificate must be completed and meet the requirements set out within the Joint Money Laundering Steering Group Guidance for UK Financial Sector.

We reserve the right to ask for additional customer information, including identity evidence, where it is deemed necessary.

Expand Lending over 90% LTV

For schemes where we lend over 90% LTV we require three month’s personal bank statements to be provided by each applicant in addition to any additional income verification.

For applications under the Help to Buy: mortgage guarantee scheme the applicant will need to meet additional criteria:

  • Income multiples must be less than 4.5 times income.
  • Maximum purchase price or property value £600,000
  • Applicants cannot own another property in the UK or abroad
  • The property must be owner-occupied
  • The method of repayment must be capital and interest
  • Must not be credit impaired
  • Must meet our income evidence requirements, please refer to
    the Evidence Requirements Guide for further details.

Please refer to other LTV restrictions, i.e. types and purpose of loans where we lend.

Expand Maximum age

 

Where any loan part is on an Interest only basis the mortgage term cannot exceed the applicants 65th birthday.

75 years maximum at the end of the mortgage term where no loan part is on Interest only.

We do not lend above an applicant's intended retirement age and we will not accept any case where your clients’ selected or anticipated age of intended retirement is over 75 years (or 65 years if any loan part is on Interest only).

For existing Santander mortgage customers moving home who are borrowing the same or less, we may consider applications where the mortgage term currently runs past the applicants’ selected retirement age. The term exceeding retirement cannot be extended any longer.

We undertake regular checks to assess the plausibility of your clients’ selected or anticipated age of retirement on all applications and we may request further information or evidence to support this.

 

Expand Portability

It is possible to ‘port’ most existing products to a new mortgage providing it is for house purchase/home ownership but not to a property being re-mortgaged or owned mortgage-free.  A customer's entitlement to port their mortgage product is always subject to the conditions for transferring the loan to a new mortgage in their Mortgage Terms and Conditions; in particular, any new mortgage application made will be subject to a full credit assessment and the customer/property must meet our lending criteria at the time of the new application.  If we do not agree a new mortgage the applicant will not be able to port their mortgage product and they may then be required to pay an Early Repayment Charge if they subsequently redeem their existing mortgage.

Where redemption of the existing mortgage and purchase of the new property is not simultaneous, providing the purchase of the new property completes within three months of the redemption date, the existing product can be ported to the new mortgage and any early repayment charge will be refunded, as long as the customer takes the previous product for the full amount to their new mortgage.

On redemption of the existing mortgage the early repayment charge is paid in full and a refund will be made on completion of the new purchase, as long as the product is ported. If the new mortgage is less than the existing mortgage, the early repayment charge refund will be a proportionate amount.

Any additional borrowing must come from the new business mortgage product range.

See also ERC waivers for existing customers moving home section.

Where a customer chooses to port their Flexible Offset mortgage to a new property the Sale and Purchase must be simultaneous. The three month Early Repayment Charge waiver window does not apply (because there is no Early Repayment Charge).

Expand Property Investment Club

We do not accept applications where the property is being purchase by, from or connected to a Property Investment Club.

 

Expand Self employed

 

Where 20% or more shareholding in a company is held treat your client as self-employed. Where the applicant’s shareholding in a company (or combined shareholding of all applicants’) is less than 20%, treat your client as employed. For family business employment, we require bank statements evidencing the latest 3 months salary credits.

We will not accept applications from customers who have been self-employed or owned their business for less than two years.

Where accounts are marked with a ‘going concern’ qualification the application will be declined.

We can consider alphabet shares as income for a director of a limited company.

 

Expand Solicitor panel

All mortgage applications are required to use a solicitor from the Abbey panel.  To find an appropriate local solicitor please use the solicitor search facility on our website.

 

Expand Voter's Roll (Electoral Register)

Applicants who cannot be traced on the voter's roll for the years they have lived at a property, may be considered subject to a letter from the local authority confirming they had registered for those years. For applicants who did not register at the address a written explanation should be obtained and submitted for consideration


Fees

Expand Booking fees

Booking fees are charged on some of our products. Where the fee has been added to the loan, the added fee will attract interest over the term at the product interest rate. Your client can repay the booking fee up to 14 days after completion without incurring any interest on the booking fee. This does not impact on the ERC overpayment facility.

 

Expand Broker fees

We allow broker advice fees to be added to the loan subject to the fee not exceeding 1% of the total loan and where the Loan to Value including the fee is less than 75%.

Where a fee is being added to the loan this must be documented in Introducer Internet “Notes” in the following format:  “The broker fee is included within the mortgage advance”.

Expand Early Repayment Charge (ERC) waivers for existing customers moving home

If an existing customer moving home does not want to port their existing deal they have the following options if they are still within their product period

  1. Pay their ERC in full and select a new business product
  2. If the customer has less than 6 months remaining until product expiry at the time of application for a new mortgage, 100% of the ERC will be waived as long as they borrow at least the same amount.  If the new mortgage amount is less than 100% of their current balance they are eligible for a proportionate ERC waiver.  See an example below of an indicative proportionate ERC waiver:

Current mortgage     £100,000
New mortgage         £90,000
ERC waived             90%

In the future, we may withdraw this offer.

You will need to inform your client that they must tell their solicitor to deduct the full or partial amount of ERC waiver from the redemption monies if redemption and completion are simultaneous.  If completion is non-simultaneous, the customer must pay the full ERC due on redemption.  As long as completion of the new mortgage is within 3 months of redemption, your client can then request a refund of the full or partial ERC.

See also 'portability' section.

Expand Early repayment charges (ERC)

If an Early Repayment Charge applies to a mortgage, customers are able to make capital repayments of up to 10% of their total outstanding loan balance each calendar year without incurring a charge. The minimum capital repayment is £500. If the booking fee has been added to the loan, the customer can repay this up to 14 days following completion. Repayment of the booking fee will not affect a customer’s ability to repay up to 10% of the capital each calendar year, free of any Early Repayment Charge.

The mortgage must remain with us until the product charge end date or an ERC will apply. In addition, if a benefit package is taken with the product, there is a benefit end date which may differ from the product charge end date.  If the benefit end date is before the product charge end date, the mortgage must remain at the appropriate Fixed/Tracker rate until the product charge end date.

Should your client redeem their mortgage before the end date on the benefit package, they will need to repay the benefit (£250 cash back or £200 for remortgage legal work).  The benefit end date is shown on the KFI and the Rate Bulletin.  The repayment of the benefit will be in addition to any product early repayment charge which may apply.

Your client will not pay an ERC if on or before the charge end date, they:

  • Simultaneously with redemption take a mortgage on a new property that completes with us for the same amount and product terms as the previous mortgage.
  • Simultaneously with redemption, where their existing deal has less than 6 months to expiry, elect to take a new product with us for at least the same amount.  Please refer to the 'ERC waivers for existing customers moving home' section for more information.

For Variable Rate Tracker and Fixed Rate mortgages, the ERC is expressed as a percentage of the customer’s outstanding mortgage balance at the time of redemption. The level of charge differs by product type and term. The ERC percentage remains the same until the charge end date.

Expand Higher Lending Charge

A Higher Lending Charge is required to cover the excess loan over and above 75% LTV. We calculate the fee as below and this can be added to the loan or paid at completion.

We do not charge a HLC for Help to Buy: mortgage guarantee cases.

LTV Rate
Up to 90.09% No fee
90.1 to 92.5% 7.25% of the whole loan amount above 75% LTV
92.51% to 95% 8% of the whole loan amount above 75% LTV

Expand Mortgage account fee

There is a Mortgage Account Fee of £225, which is payable on completion of the mortgage. The fee can be deferred until the end of the mortgage.

 

Expand Pre-completion product change fee

A product change fee of £199 is payable by the customer if they want to change to another product after their mortgage application has been transmitted and prior to the product expiry/completion deadline.

You need to notify us to change the product and provide us with the customer's valid debit/credit card details.

If the customer has already paid a booking fee upfront for the original product and wants to change to another product, the new product booking fee would be payable as well.

Expand Refund of booking fees

If your client changes their mind after we have collected the booking fee, we would not refund it unless one of the following applies:

  • We decline the application for any reason prior to the offer being issued,
  • After the valuation has been completed our surveyor decides that the property would be inadequate security for us,
  • Our surveyor down-values the property and your client needs to select a different product.

Expand Refund of valuation fees

 

All our valuation fees are non-refundable. However:

 

  • If we have not instructed the valuation, we would refund the valuation fee in full
  • If we have instructed the valuation, but it has not been undertaken, we would refund the valuation fee, less the non-refundable survey set up fee.

Expand Telegraphic transfer

 

All Cashbacks together with advance monies will be telegraphically transferred to the legal adviser at the time of completion. A fee of £35.00 will be deducted from the loan on completion. No monies need to be collected from the customer.

 


Product

Expand Additional Loans

We currently only offer Additional Loans through our branches and telephone channel.

Additional Loans are only available on a Capital and Interest basis.

Existing borrowers where any existing loan part is on an Interest Only basis may not currently be considered for an additional loan or Flexible Offset credit limit review.

Expand Benefit Solutions

We offer remortgage and homebuyer benefit packages on selected products. A benefit ERC will be payable if the mortgage is redeemed early.

Homebuyer Solution (for First Time Buyers and Movers only)

  • Free Valuation

    Customers will receive a free valuation for mortgage purposes (up to a property value of £2.5 million) - provided by our Group Survey Office. 

  • If a customer requires a Homeview survey, they will have to arrange and pay for this separately. We will not refund the valuation for mortgage purposes fee.



  • And - £250 cashback

    Customers will receive £250 cashback at completion, as a contribution towards legal costs.

Remortgage Solution (for remortgage customers only)

  • We will provide a free valuation for mortgage purposes (up to a maximum property value of £2.5 million). We will arrange and pay for the legal work involved in transferring the mortgage. Alternatively, if a solicitor of your client's choice is used we will provide £250 as a contribution towards the legal costs incurred.

 

Expand Cashback

All cashbacks are telegraphically transferred on completion.

Expand CAT mortgages

We do not offer CAT mortgages.

Expand Daily interest

Interest is calculated daily and charged monthly.

Expand Direct Debit

Payment by Direct Debit mandate is compulsory for all products. Payments can be taken on any day of the month between 1st and 28th.

Expand Flexible Offset

  • Maximum Credit Limit (including available funds) is 75% LTV
  • No second charges allowed on the property
  • Not available for business customers, right to buy cases within the first five years, homebuyer scheme, shared ownership properties, shared equity, buy to let, DWP mortgage benefit customers
  • Not available in the Isle of Man
  • The loan is not used for business purposes
  • The Flexible Offset mortgage cannot be used in conjunction with any other product
  • The Flexible Offset mortgage does not have a product ERC, however a benefit ERC may apply
  • The Flexible Offset mortgage can be ported to a new property but the Sale and Purchase must be simultaneous
  • For new Flexible Offset mortgage applications on or after 25 July 2014, drawdowns from available funds may be assessed for affordability and may only be allowed on a Capital and Interest basis. 

Expand General conditions

  • All offers are subject to availability and may be withdrawn at any time
  • All customers must meet our normal lending policy
  • We reserve the right to withdraw the mortgage rate and reclaim the benefit if the property is no longer owner occupied or the customer does not comply with the conditions of their mortgage
  • If the property has been owned for less than six months, the application may be referred for investigation.  This could result in delays to completion or in some instances the application being declined.

Expand Interest only - existing customers moving

Existing Abbey mortgage customers on an interest-only basis moving home may port their existing products and may also increase their borrowing up to 50% LTV on the new property.

Existing Abbey mortgage customers who have any part of their existing loan on an interest only basis can port their product(s) to a new property, subject to all of the conditions below:

  • the new overall LTV is over 50% and less than or equal to 75%;
  • any part of the new mortgage is remaining on an interest-only basis;
  • the loan amount on interest only stays the same or reduces; and
  • the overall lending is the same amount as the existing loan or less, no top-up allowed.

We reserve the right to withdraw this in the future.

These customers must be referred to our telephone channel.

Expand Interest only applications

We allow Interest only applications provided there is an acceptable source of funds to repay the capital at the end of the mortgage.

Where any loan part is on an Interest only basis the mortgage term cannot exceed the applicants 65th birthday.

We accept the following repayment vehicles where any part of the mortgage is on an Interest only basis:


Sale of the mortgaged property

  • Minimum £150,000 equity in the property;
  • Cannot be topped up by another repayment vehicle;
  • Includes loans on part and part; or
  • Maximum term 25 years.

Investment vehicles

  • Maximum term 35 years, or policy maturity date if sooner.
  • Endowment policy and Mortgage-related ISA policy: value based on mid-point projection at maturity. Latest annual statement from the life company (may be no more than 15 months old) is required as evidence.
  • Equity-based investments (shares, unit trusts, Open Ended Investment Companies (OEIC’s)) and Investment Bond: value based on current cash value (100%). Latest statement issued by the administering company (must not be more than 12 months old) required as evidence.

Acceptable investment vehicle:

  • May be held in an ISA but this is not a requirement. Please note that cash ISA’s are not acceptable.
  • Must have been held for a minimum of 12 months and cover the Interest only amount.
  • Must be administered by an FCA-regulated financial services firm with ‘authorised’ or ‘EEA authorised’ status.
  • All owners of the repayment vehicle must match the names shown on the application.

We require evidence to support the plausibility of your clients’ repayment strategy in all cases.

We do not accept any other repayment vehicle: For example pensions, sale of other properties (including BTLs), bonuses, overpayments, cash savings (including cash ISA) or inheritance.

Interest Only – maximum LTV

Where any part of the mortgage is on an Interest only basis the maximum LTV for the overall lending is 75%. Any lending over 50% up to 75% LTV must be on a capital and interest basis.

Interest Only – affordability

For all Interest only applications, we will assess affordability on a capital and interest repayment basis and assume a repayment period of 25 years minimum. If the actual mortgage term selected is longer than 25 years with a funded investment vehicle, the longer term will be used. The maximum term for the overall loan if sale of property is the repayment vehicle is 25 years.


Expand Maximum LTV

  • 95% LTV – up to £570,000 (Help to Buy: mortgage guarantee only)
  • 90% LTV – up to £570,000 
  • 85% LTV – up to £1,000,000
  • 75% LTV – more than £1,000,000

The maximum loan to value is also affected by the type and purpose of loan, and the property type.

Expand Maximum term

The maximum term is 35 years.

For pure interest only mortgages the maximum term is 25 years.

For mortgages under the Help to Buy Equity Loan scheme the maximum term is 35 years. 

Expand Minimum loan

Minimum loan sizes apply to our products. Please refer to our latest rate guide for details.

The minimum loan size relates to each individual product and not the total of all the loan parts.

 

Expand Minimum term

Five years (subject to product term).

Expand Mortgage buffer

There is a £750 buffer available on all purchase and remortgage offers excluding:

  • Existing customers porting
  • Flexible Offset products
  • Help to Buy: equity loan scheme
  • Help to Buy: mortgage guarantee scheme
  • Right to buy
  • Shared ownership
  • Undervalue transactions

Please note the mortgage buffer can exceed the product LTV, but it cannot go over 90% LTV.

Where this facility is required, please ensure your customer informs their solicitor. 

Expand Mortgage product maximum loan size

The maximum loan size on mortgage products relates to the total borrowing required by the customer, not just the borrowing on that product.

Expand Repayment methods

Repayment methods available are capital and interest, interest-only with an acceptable repayment vehicle and sale of property with a minimum of £150,000 equity.

Expand Top up of an existing product

Prior to completion, the maximum top up available is 10% of the original loan/amount, the minimum is £1,000.

 

Expand Types and purpose of loans where we lend

The maximum LTV varies by the type and purpose of the loan and by the property type..

Type of Loan Maximium LTV Comments
Residential mortgage under the Help to Buy:
mortgage guarantee scheme
95% Residential use only.
Standard residential mortgage 90% Residential use only. Excludes Remortgage.
Flats 85% Can go over seven storeys subject to survey.  Suitability of the property must be established.
New build - houses
               - flats
85%
80%
See new build section.
Publicly-assisted loans   90% Includes schemes where the Local Authority or Housing Association offer to fund the applicants deposit as part of an incentive to move home.  
 Remortgage
 - standard remortgage
 - Shared Ownership staircasing
 - change of borrower
 - capital raising
 - debt consolidation
 
90%
90%

90%
85%
75%


Residential use only



The maximum amount allowed for a loan part(s) where the prupose is debt consolidation is £35,000, or 35% of the total lending (whichever is lower).  Where the LTV is no more than 50% the 35% limit will not apply (but the £35,000 will apply as a maximum regardless of LTV). 
Any Retained Property  90% Where the retained property is mortgaged with Santander UK plc the maximum LTV on the existing property is 75% if let; or 90% if not let.
Right to Buy/Acquire 100% 100% of discounted purchase price subject to a maximum of 90% of the property value. Additional lending may be considered for home improvement purposes only. This will be subject to the local authority’s/housing association’s unconditional postponement of their charge. If they will not provide this the application may not proceed.
Second Homes/Holiday Homes 80% For owner occupation.
Shared ownership 90% On share of purchase amount - if Scheme provider requires customers to obtain a Homebuyers report this will be down to the customer to arrange their own report. Minimum 25% of share.
Purchasing a property for occupation by the customer's immediate family (customer not resident)
80%  No tenancy agreement in place.

Expand Types of property where we lend with certain conditions

 Type of Property  Conditions to be met
Farms We do lend on farmhouses that are independent from the farm, providing they are not contiguous.
Precast Reinforced Concrete properties (PRC) We lend on PRC homes where they have been repaired to certain standards confirmed by a structural engineer under a PRC approved licence, subject to our valuer's approval.
Agricultural Land/Large Acreage Properties with land where agricultural restrictions do not exist must have no more than 10 acres of land.

Expand Types of property/loans where we do not lend

We do not lend on the following types of property/loan

  • Agricultural restrictions
  • Bridging loans
  • Buying a property for investment
  • Commonhold tenure
  • Farms where  the farm and accommodation are together
  • Freehold flats/maisonettes
  • Guarantor Mortgages
  • Live/work units 
  • Mobile homes/River boats
  • Properties with 10 or more acres of land 
  • Purchase of land
  • Shared Equity
  • Low cost housing/restricted resale covenant schemes
  • Sheltered housing and properties with restricted age for the occupants

 


Property

Expand Home improvements

Estimates are required for any Home Improvements so that the surveyor can provide an after works value.

Expand Lease

Minimum term at the start of the mortgage is 55 years. There must be at least 30 years remaining on the lease at the expiry of the mortgage term.

Applications are subject to a satisfactory valuation. In some cases where the minimum term is less than 80 years it may be regarded as unacceptably short, and where it affects marketability the lease term will be reflected in the valuation.

 

Expand Let to Buy

The maximum LTV on the let property if remaining mortgaged with Santander UK plc is:

  • Houses - 75%
  • Flats - 75%

We also require the following evidence:

Evidence of proof of deposit must be held on your file and full details should be provided in the notes section within the Full Mortgage Application on Introducer Internet. In some circumstances we may request evidence of deposit that you hold.

Expand Low cost housing/restricted resale covenant scheme

We do not accept low cost housing/restricted resale covenant scheme applications.

 

Expand New build

Definition of new build

This relates to all new build/converted properties including affordable housing such as shared ownership.  We define new build as any of the following:

  • Property built/converted within the last 12 months (i.e. based on the date of the completion certificate).
  • Property has not been previously occupied (for converted properties - that is since the conversion has been undertaken)
  • Property is being sold/marketed by a builder or developer
  • Where the property is within a development that was once used for commercial or other use, i.e. not previously used for residential purposes.

Builders may offer sales incentives to prospective buyers to encourage them to purchase their properties. An incentive is anything the builder gives or provides to the buyer in cash or goods. 

We will accept up to 5% cash back towards the purchase price (no financial limit) and builder’s payment of the applicant's legal fees and stamp duty only. Any reasonable non-cash incentives, eg white goods, carpets, curtains etc. will be ignored.

Please note, we do not accept New Build applications where any part of the applicant’s deposit will be raised from an unsecured personal loan which is subsidised by a builder or developer.

Standard new build LTV limits

    House  85%
    Flat  80%  


Please be aware that all applications will be subject to additional policy including maximum income multiples. A maximum of five times income (primary and secondary income) is applicable for new builds.

For Section 106 Agreements, it is no longer necessary to send these and associated documents to us for approval.  We will rely on our existing instructions to our panel solicitors, which require them to approve the documentation.

Expand Retained Properties Form

Please complete the Retained Properties Form and upload a copy of the summary for all mortgage applications where your client will continue to own a retained property after the completion of this new application.

The Form captures general property information as well as the monthly running costs, mortgage payment, and any rental income for each retained property. It then automatically calculates:

  • The total monthly costs of each applicant’s retained properties.
  • Whether we can consider a let property as being self-financing, or the amount of any shortfall.
  • Whether any rental income can be used as additional income in the mortgage application.

You will need to input these figures (as appropriate) in the affordability calculator and on Introducer Internet.

For mortgaged properties please also remember to provide details of the combined monthly payments and combined balances of the mortgages on Introducer Internet.

Expand Retained property - definition

Retained property includes: second homes, holiday homes, properties occupied by dependent relatives and let properties, whether mortgaged or mortgage-free.

Expand Retained property - Let

The Form captures the actual or estimated rent, and the costs of running each property, including mortgage payment, agent’s fees, rental voids, and property maintenance.

A let property that’s mortgaged will be considered self-financing if:

(i)  The gross rent covers the running costs; and

(ii)  The gross rent exceeds 125% of the stressed mortgage payment*

If a property is not self-financing, any shortfall must be included in the ‘Costs in respect to retained property’ field on the affordability calculator and Introducer Internet.

We may be able to consider the rental income from a let property as additional income in our affordability assessment:

  • If the property is mortgaged, we can consider as secondary income any gross rent in excess of 150% of the stressed mortgage payment*
  • If the property is mortgage-free, then we can consider as secondary income any gross rent less the monthly running costs of the property.

* The stressed mortgage payment is calculated using the higher of:

  • The actual monthly mortgage payment; or
  • The monthly mortgage payment using the actual method of repayment at our standard affordability rate.

Expand Retained property - Mortgaged with Santander

If your customer intends to retain any let properties mortgaged with Santander UK plc and take a new residential mortgage with Santander UK plc, the maximum LTV for the retained property is 75%.

Expand Retained property - Not let

The Form captures and totals the monthly costs (e.g. stressed mortgage payment*, council tax, utilities, maintenance etc.).

The total of these costs must be included in the ‘Costs in respect to retained property’ field on the affordability calculator and Introducer Internet.

Financial contributions from an occupant cannot be considered when assessing affordability.


* The stressed mortgage payment is calculated using the higher of:

  • The actual monthly mortgage payment; or
  • The monthly mortgage payment using the actual method of repayment at our standard affordability rate.

Expand Right To Buy/Acquire

 

The customer must live in the property and Right to Buy/Acquire papers are required.

 

Expand Self build

We do not offer self build mortgages

Expand Shared equity

We will only consider applications that are part of the Government’s Help to Buy Equity Loan scheme. The applicant must meet the eligibility rules for the Help to Buy Equity Loan scheme AND our standard lending criteria. We will need to see a copy of the ‘Authority to Proceed’ document issued by the Help to Buy Agent before the application can be reviewed by our underwriters.

We do not accept any other shared equity scheme.

For mortgages under the Help to Buy Equity Loan scheme the maximum term is 35 years.

Expand Shared ownership

Where the customer owns less then 100% of the property, with the remaining share being owned by a third party, our LTV restrictions apply to the value of the share owned by the customer. The shared ownership agreement must allow staircasing to 100% ownership.

Expand Tenanted properties

Please note that remortgage applications where the property is currently tenanted and/or is not currently occupied by the applicant will be declined, regardless of any future intentions.

 

Expand Undervalue transactions

Where the purchase price is within 80% of the value, we can consider applications using LTV based on the purchase price of a property below its market value, subject to the relationship between vendor and purchaser meeting our requirements.

 


Valuation

Expand Valuation services and fees

Our valuation calculator works out how much your client will need to pay.

  England, Wales & Northern Ireland Scotland
Purchase price up to and including5 Valuation for Mortgage Purposes6 Home Buyer7 Valuation for Mortgage Purposes6 Home Buyer7
£50,000 £185 £350 £95 £350
£100,000 £220 £400 £95 £400
£150,000 £260 £450 £95 £450
£200,000 £295 £500 £95 £500
£250,000 £330 £550 £95 £550
£300,000 £365 £600 £95 £600
£400,000 £430 £700 £340 £700
£500,000 £490 £800 £400 £800
£600,000 £550 £875 £460 £875
£700,000 £615 £950 £525 £950
£800,000 £680 £1000 £590 £1000
£900,000 £740 £1050 £650 £1050
£1,000,000 £805 £1100 £715 £1100
£1,500,000 £940 £1385 £850 £1385
£2,000,000 £1065 £1700 £975 £1700
£2,500,000 £1190 £2025 £1100 £2025

5 Where the purchase price is a concessionary or reduced figure, for example, when purchasing a council home, the fee will be based on the valuation rather than the purchase price.

6 This includes a non-refundable survey set up fee of £90.

7 This includes a non-refundable survey set up fee of £100.

For properties over £2.5 million, please contact us.

External Inspection Valuation

An External Inspection Valuation (EIV) or Automated Valuation (AVM) is applicable to certain products. They are for the sole use of us and no fee is charged.

We reserve the right to upgrade the EIV to a full inspection, in which case the surveyor will contact the customer direct. No fee is charged in these circumstances.

Re-inspection fee

There is a re-inspection fee of £55 if one of our surveyors has to make an additional visit to a property before we release any money we’ve retained.