Mortgage lending criteria

June 2019

The following sections have been updated:

• Lease
  • Updated to remove 55 year minimum term at the start of the mortgage and increased the minimum leasehold term at maturity where any part of the loan is on interest only from 30 years to 50 years. 

• Interest only applications
  • Updated to increase maximum LTV for interest only applications from 50% to 75% where an applicant has a gross income of more than £250,000.

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 Government's Help to Buy (England or London) 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 applying unemployed?
8. Are any of the customers under 18?
9. Will the end of the mortgage term exceed any applicant's 75th birthday?
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 Santander?
13. If this a remortgage application, does the customer currently not occupy the property?
14. On completion of this mortgage will the applicant(s) own six or more properties that are mortgaged?
15. Is this a type of property or loan that we do not lend on?

Also, has any customer on the application:

1. Ever had a property repossessed by a mortgage lender?
2. Ever been bankrupt or subject to an IVA?
3. Ever had a criminal conviction, unless the conviction is for a minor traffic offence, or spent under the Rehabilitation of Offenders Act 1974?

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.

The affordability calculator is available on our website.

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

However, if a customer has credit commitments with four months or less to run at the time of application submission, these don't need to be included, provided that the customer doesn't intend to take on a new credit commitment to replace the existing one. You must record in the general notes section in Introducer Internet:

• Applicant name
• Commitment type
• Balance
• Lender
• Monthly payment
• Confirmation that the customer doesn't intend to take on a new credit commitment.

Please note that if a customer has a financial agreement which has a balloon payment associated to it, this must always be declared as a financial commitment.

To make sure a realistic figure is used for affordability purposes, the system will automatically use 100% of primary income and a maximum of 65% 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

_{1. Please refer to our evidence requirements guide for further details and requirements.}

_{2. Where either the benefit recipient or their partner's total gross income is above £50,000, child benefit must not be included as a source of income.} 

Arrears in the previous 12 months are not acceptable.

Any customer who has ever been bankrupt will be declined.

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

Low scoring applications may be declined.

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 current account that has been operated continually within agreed limits and showing salary credits for a minimum of six months.
• A Santander savings account with a balance of at least three months' net earnings of all customers in the last twelve months.

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.

We’ll consider applications where any element of employed income is paid in any of the following foreign currencies:

• US Dollar (USD)
• Euro (EUR)
• Swiss Franc (CHF)
• UAE Dirham (AED)

The sterling equivalent must be calculated and discounted by 25% to allow for currency fluctuations. This figure must be input into the £ equivalent field in Introducer Internet.

You must record in the general notes within the Regulation Section in the full mortgage application in Introducer Internet:

• Foreign currency amount.
• GBP equivalent.
• Exchange rate on the day of the calculation.
• Date of calculation.

The table below shows our maximum income multiples. Income may be a combination of primary and secondary incomes:

• For remortgages without capital raising the maximum income multiple is 5.50x income, regardless of the income bands in the table above.
• Where any part of the mortgage is on interest only the maximum income multiple may vary.
• Our income multiples are for guidance only and may change at short notice. All applications must be affordable. 
• Please use our affordability calculator to see how much your client may be able to borrow.

Some payslip deductions where the applicant confirms the deduction is discretionary may be excluded from our affordability assessment, subject to confirmation in the Introducer Internet general notes.

Non-discretionary deductions, e.g. student loans, season ticket loans, childcare vouchers, cannot be excluded from the affordability assessment.

We do not accept applications where the customer advises they will cancel a company pension scheme to support affordability.

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 accept Help to Buy: ISA as a source of deposit for first time buyers.

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 list above is not exhaustive, so there may be other instances where we will not accept a gifted deposit.

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.

Not required unless requested specifically.

Not required unless requested specifically.

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

We do not accept new applications if:

• the applicant’s total secured commitments exceed £150,000 at application and they have more than five secured credit commitments at application, OR
• will own six or more mortgaged properties on completion (including the property being purchased/remortgaged).

We do not allow self certification of income.

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 there will be a person over age 17 living in the property who is not on the mortgage, they must sign our Deed of Consent and Charge to postpone/charge to Santander any occupancy right or interest they may have in the property. This Deed is on the reverse of our Mortgage Deed (Standard Security in Scotland).

AIV is a method we use to verify an applicant's stated income by comparing Current Account Turnover sourced from Credit Reference Agencies. Where we use AIV, we confirm this at the full mortgage application decision stage in Introducer Internet and you must:

• be satisfied the income declared is accurate and have supporting evidence of net income which meets our requirements when you submit the case. You don't need to upload this to us.
• keep the evidence on file for a minimum of two years from the date of completion as we reserve the right to see copies of this.

If you resubmit a case or there's a material change, we check the eligibility for AIV.

If we don't use AIV, we confirm what income evidence you need to upload to support the application.

Our detailed income evidence requirements are set out on our website. We reserve the right to request this evidence.

Intermediaries are required to act appropriately where an application represents a potential conflict of interest situation. Examples of this include dealing with applications in your own name(s) or that of a relative such as:

• Partner (e.g. spouse/civil partner)
• Parent
• Grandparent
• Child
• Sibling

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

We will consider customers on non-permanent employment contracts.

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.

We do not accept cryptocurrencies as a source of deposit.

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

We will accept applications on an Execution Only basis 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.

If your client already has a Santander mortgage, there are a couple of options available to them when they're moving home.

Porting

Porting is when an existing Santander mortgage customer moves home and transfers their mortgage product for the remainder of its term. Most of our products are portable. 

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 remortgaged 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 customer 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.

• If borrowing the same or more, on redemption of the existing mortgage, the early repayment charge (ERC) is paid in full and will be refunded after completion of the new purchase.
• If borrowing less, the ERC refund will be a proportionate amount, i.e. we’ll only refund an ERC on the amount your client has ported.

Any additional borrowing must come from the new business mortgage product range. In cases where no additional borrowing is required, a valuation fee may be payable.

Where a customer is porting their existing mortgage to a new build property, they’ll receive a refund of the ERC in line with the criteria above, if the purchase of the new property completes within six
months of the redemption date.

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). 

Choosing a new product

Existing Santander and Alliance & Leicester mortgage customers moving home can choose a new business product for their total borrowing. Where they’re currently tied in:

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

A customer who has never owned a property, whether in the UK or abroad.

On joint applications all customers must meet the definition.

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).

^{1 Croatian nationals are subject to additional regulations for employment in the UK.}

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.

We do not accept applications from foreign nationals holding diplomatic immunity.

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 should have been resident and eligible to work in the UK for a minimum of 12 months.

We do not accept guarantor applications.

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 the UK Financial Sector.

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

For lending over 90% LTV, the applicant will need to meet the following criteria:  

• We require the latest three months' personal bank statements for each applicant in addition to any additional income verification.
• The method of repayment must be capital and interest
• Must meet our income evidence requirements. Please refer to our Evidence requirements guide for further details.

For LTV restrictions please refer to the 'Types and purpose of loans where we lend' section.

We consider applications where the mortgage term does not exceed:

• the oldest applicant's 75th birthday; or
• the oldest applicant's 70th birthday where any 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 client's selected or anticipated age of intended retirement is past their 75th birthday.

Existing Santander mortgage customers moving home:

• If they are borrowing the same or less - we may consider applications beyond the oldest applicant's selected retirement age. However, the term cannot be extended and cannot go past the oldest applicant's 75th birthday.
• If any loan part is on interest only - we may consider applications beyond the oldest applicant's 70th birthday, as long as they are not increasing the interest only amount. However, the term cannot be extended and cannot go past the oldest applicant's 75th birthday. 

In all cases we undertake regular checks to assess the plausibility of your client's selected or anticipated age of retirement and we may request further information or evidence to support this.

Please refer to the 'Existing mortgage customers moving home' section for more information.

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

Where the applicant's shareholding in a company (or combined shareholding of all applicants) is 20% or more, 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 three 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 negative 'going concern’ qualification the application will be declined.

We can consider income from alphabet share ownership for a director of a limited company.

Please see our evidence requirements guide for more information.

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

Customers 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

We do not accept an employer's reference as proof of income. Where payslips are provided, they cannot be handwritten or amended in any way. 

Where there are unexplained downward trends or sharp increases in the most recent year’s trading figures, please provide additional information to explain why.

Acceptable proof

When proof of deposit is required this can be:

• Copy of savings book or bank statement showing the full amount of the deposit.
• Equity – confirmation of the sale price and balance outstanding.
• Capital raised from another property – copy of the mortgage offer letter.
• Endowment/investment policy maturity – letter showing maturity value.
• Gifted deposit - please provide the following details in the application:
  • Full name of person providing the gift
  • Relationship to applicant
  • Gift amount
  • Gift is non-repayable
  • Confirmation of whether the person providing the gift will live in the property and whether any legal interest remains (including second charge).

This list is not exhaustive, other methods may be acceptable.

All evidence must be:

• Provided by MATS document upload when the mortgage application is submitted.
• Retained on file for a minimum of two years from the date of application.

We undertake regular checks to assess the plausibility of your client’s repayment strategy and we may request further information or evidence.

Investment vehicle – additional requirements

• Investments may be held in an ISA but this is not a requirement. Cash ISAs 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 an ‘authorised’ or ‘EEA authorised’ status.
• All owners of the repayment vehicle must match the names shown on the application.
• The applicants must not have reduced their holding since the last statement.

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.

There is an account fee of £225, which is payable on completion of the mortgage. The fee can be deferred until the end of the mortgage.

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'.

If an ERC applies to a loan part, customers are able to make capital repayments of up to 10% of the balance on this loan part each calendar year without incurring a charge. A minimum amount may apply. If the product fee has been added to the loan, the customer can repay this up to 21 days following completion. Repayment of the product fee will not affect a customer’s 10% ERC free allowance.

The mortgage must remain with us until the product charge end date or any applicable ERC will be charged. In addition, if a benefit package is taken with the product, there is a benefit package end date which may differ from the product charge end date. If the benefit package end date is before the product charge end date, an ERC will still be applicable until the product charge end date.

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

Your client will not pay any applicable 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. Please refer to the 'Porting' section for more information.
• Simultaneously with redemption, where their existing deal has six months or less to expiry at application, 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.

A product 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 term. The ERC percentage remains the same until the product charge end date.

All cashbacks together with advance monies will be telegraphically transferred to the legal adviser at the time of completion. A fee of £35 will be deducted from the loan on completion. No monies need to be collected from the customer.

Product fees are charged on some of our mortgages. 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 product fee up to 21 days after completion without incurring any interest on the product fee. This does not impact on the ERC overpayment facility.

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

• The application is cancelled prior to the offer being issued.
• We decline the application for any reason prior to the offer being issued.
• After the valuation has been completed our valuer decides that the property would be inadequate security for us.
• Our valuer down values the property and your client needs to select a different product.
• Your client decides not to proceed with their mortgage offer during the 'Mortgage Credit Directive period of reflection'.

All our valuation fees are non-refundable. However:

• If your client cancels the valuation before it's carried out, we would refund the fee in full.

We currently only offer additional loans through our branches and telephone channel. 

All cashbacks are telegraphically transferred on completion.

Interest is calculated daily and charged monthly.

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

• Available to existing Flexible Offset mortgage customers moving home only.
• The Flexible Offset mortgage can be ported to a new property but the sale and purchase must be simultaneous.
• No second charges allowed on the property.
• Not available for homebuyer schemes, Shared Ownership properties, Help to Buy, DWP mortgage benefit customers.
• The loan cannot be 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.
• For any Flexible Offset mortgage, drawdowns from available funds will be assessed for affordability and will only be allowed on a capital and interest basis or interest only up to 50% LTV for an applicant with gross income of £250k or less, or 75% LTV for an applicant with gross income of more than £250k.

• All product 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.

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

For new customers and existing borrowers who are increasing the interest only amount: 

• Where any part of the mortgage is on interest only, and the combined gross income is less than £100,000, the maximum income multiple is 4.45 times income. Income may be a combination of primary and secondary incomes and proof of income must be evidenced.
• Where any part of the mortgage is on an interest only basis the maximum LTV for the overall lending is 85%. Where at least one applicant has a gross income of more than £250k, any lending over 75% LTV must be on a capital and interest basis. For an applicant with gross income of £250k or less, any lending over 50% LTV must be on a capital and interest basis.
• We will assess affordability on a capital and interest basis. Please use our affordability calculator to determine the client's potential borrowing.
• Where any loan part is on an interest only basis the mortgage term cannot exceed the applicant's 70th birthday.

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

Sale of the mortgaged property

For new customers and existing borrowers who are increasing the interest only amount:

• Minimum £150,000 equity in the property;
  • For part interest only sale of property with part capital and interest, the £150,000 is calculated on the equity at the end of the mortgage term.
  • For pure interest only with sale of property the £150,000 is based on the deposit/equity at application.
• Includes loans on part and part;
• Maximum term 25 years. For loans where interest only sale of property is combined with another loan part repayment method, the term for this cannot exceed the sale of property term.

Investment vehicles

• Maximum term 25 years, or policy maturity date if sooner.
• Mortgage-related endowment policy and mortgage-related ISA policy: value based on mid-point projection at maturity. Latest annual statement from the life company (must be no more than 15 months old) is required as evidence.
• Investment portfolio (shares, unit trusts, open ended investment companies (OEICs)) and investment bonds: 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 vehicles

• May be held in an ISA but this is not a requirement. Please note that cash ISAs 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: e.g. pensions, sale of other properties (including BTLs), bonuses, overpayments, cash savings (including cash ISA) or inheritance.

We’ll consider applications where a repayment vehicle is held in a foreign currency on a case by case basis for existing Santander mortgage customers moving home borrowing the same or less only.

Existing Santander mortgage customers who have any part of their existing loan on an interest only basis can port their existing deal subject to our current lending criteria. You can submit these applications to us through Introducer Internet.

If there is no increase in any interest only loan part and the existing vehicle was previously (but no longer) acceptable to Santander, we may consider their new application where the existing mortgage is being simultaneously redeemed and already falls outside of the current interest only policies stated. This is subject to:

• maximum LTV 85%
• maximum age not to exceed 75th birthday of any borrower.

This is subject to no further increase in either the existing LTV or term. Lending into future requirement cannot continue where the borrowers require an increase in lending.

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

The maximum term is 40 years, including for mortgages under the Help to Buy: equity loan scheme. Where any part of the mortgage is on an interest only basis, the maximum term is 25 years for all repayment vehicles.

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.

Five years (or product term if longer).

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
• 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 make sure your customer informs their solicitor.

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

Our mortgage offers are valid for six months from date of issue or up to the product completion deadline, whichever comes first. We will consider an extension subject to the following:

• Any necessary supporting documentation is updated and resubmitted.
• We are notified of any change in circumstances.
• The case is re-decisioned and remains acceptable to Santander in line with our current mortgage lending policy.
• A new credit search and affordability assessment.
• A new product must be selected.
• An updated property valuation.

Repayment methods available are capital and interest, interest only with an acceptable repayment vehicle and sale of property. Please see the interest only application section.

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

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

Written estimates may be required for any home improvements so that the valuer can provide an after works value.

The minimum time remaining on the lease at the expiry of the mortgage term must be:

• 30 years for mortgages on capital and interest
• 50 years where any part of the loan is on interest only.  

Applications are subject to a satisfactory valuation.

We won't allow a remortgage of the current residential property onto letting terms with Santander UK plc when combined with a residential purchase with Santander UK plc.

The maximum LTV on the let property if remaining mortgaged with Santander UK plc is 75%.

Refer to the 'Retained properties' section for further information.

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 the deposit that you hold.

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 based on the date of the completion certificate.

Additionally, where the build or conversion was completed more than 12 months ago, new build policy applies where the property:

• has not been previously occupied (for converted properties that means since the conversion was completed); or
• is being sold/marketed by a builder or developer and has not been occupied as a residential property; or
• has not been previously used for residential purposes e.g. within a development that was once used for commercial or other use.

We do not accept:

• sales incentives on properties sold by a builder/developer which they acquired under part exchange.
• 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.

We will consider an extension to the mortgage offer subject to the conditions in the 'Offer validity' section.

Standard new build LTV limits

• House 85%
• Flat 80%

Please be aware that all applications will be subject to additional policy including loan to income multiples.

Incentives

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 do not accept property as security where there is an overage agreement.

We are unable to process applications for properties in the Isle of Man. Please contact us on 01624 644900 for further details.

Retained properties are any other properties that the applicant will own following completion of the new mortgage. This includes mortgaged or mortgage-free properties that are currently let or to be let, second homes, holiday homes and properties occupied by dependent relatives.

We will need to consider other properties in the background as part of our affordability calculation and the details are captured in Introducer Internet.

However, where the applicant is remortgaging to us and raising money for a new property, which they may or may not have found yet, please complete the additional property form.

Properties already let or to be let

A let property that’s mortgaged will be considered self-financing if the rent covers both:

• 100% of the stressed mortgage payment and the monthly running costs; and
• 125% of the stressed mortgage payment.

Our stressed mortgage payment is the higher of the actual mortgage payment or the mortgage payment using the affordability rate, which is 5% up to and including 60% LTV or 5.5% over 60% LTV.

A let property owned mortgage-free will be considered self-financing as long as the rent covers the monthly running costs.

If a property isn’t self-financing, any shortfall will automatically 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 property that is currently let as additional income in our affordability assessment:

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

We can’t consider any of the rental income as secondary income if:

• the property is not currently let;
• the rent is received in a foreign currency.

Properties already let or to be let and mortgaged with Santander

If the applicant is taking a new residential mortgage with Santander UK plc and will have any let properties mortgaged with Santander UK plc on completion of the new mortgage, the maximum LTV for each of those let properties is 75%.

Properties that are not being let

Examples are second homes, holiday homes and properties occupied by a dependent relative.

We will take into account the monthly running costs of these properties, and where the property is mortgaged we’ll use the stressed mortgage payment.

Our stressed mortgage payment is the higher of the actual mortgage payment or the mortgage payment using our standard residential affordability rate.

These costs will automatically be included in the ‘Costs in respect to retained property’ field on the affordability calculator and Introducer Internet.

We won’t consider the financial contributions from an occupant when assessing affordability.

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

For LTV limits please refer to the ‘Types and purpose of loans where we lend’ section.

We do not offer self build mortgages.

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 accept purchase applications on new build properties for the Help to Buy: equity loan scheme in England only. 

We accept remortgage applications to redeem a shared equity loan in full including the Help to Buy schemes in England, Scotland and Wales. Where the LTV is over 85% and up to 90%, the money can only be used to redeem the first mortgage and the equity loan.

We do not accept:

• Remortgage applications where an equity loan will still exist i.e. we will not allow partial staircasing. 
• Any other shared equity scheme.

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.

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

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.
• Re-sale price restrictions - where a property is sold at a percentage of the open market value.
• Mobile homes/river boats.
• Properties with ten or more acres of land.
• Purchase of land.
• Sale of property by a limited company to one of its directors, or a person connected to a director. A 'connected person' includes a spouse/civil partner or parent or child/step child of the director.
• Shared equity (apart from the Government's Help to Buy: equity loan scheme).
• Sheltered housing and properties with restricted age for the occupants.

We consider transactions:

• from an acceptable family relationship defined as:
  • spouse/civil partner (as recognised under UK Law)
  • parent/child
  • grandparent/grandchild
  • sibling

up to 100% of the actual purchase price subject to equity of at least 10% based on the market value.

• in all other situations where:
  • the purchase price is no less than 80% of the market value and/or
  • the purchase price is no more than £100,000 below the market value.

The loan to value is based on the reduced purchase price.

^{1 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.}

^{2 For Scottish purchase properties we will accept a transcription of the valuation contained in the Home Report prepared for the seller.}

For properties over £2.5 million, please contact us.

Where a product is selected that includes a free standard valuation for mortgage purposes and the customer would like a survey, they will need to arrange and pay for any associated costs separately. For help with finding a local Surveyor you can visit the RICS website.

External Inspection Valuation

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

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

Re-inspection fee

There is a re-inspection fee of £70 if one of our valuers has to make an additional visit to a property before we release any money we’ve retained.