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25. If joint application, at least one applicant must be 25
85 (at the end of the mortgage term)
Maximum Number of Applicants
£25,000 per application
Lending to Limited Companies and portfolio landlords are not accepted (four or more mortgaged properties).
The applicant(s) must currently own and occupy their own property in the UK (refer with explanation if not the case)
Maximum £750,000- if above, please refer
Minimum 5 years
Maximum 35 years
Loan to Value (LTV)
- Maximum LTV up to 75% for houses (product specific)
- Maximum LTV up to 65% for flats (product specific)
Additional information required if property not in ownership by applicants for minimum of 12 months.
- The rental income must cover at least 145% of the mortgage payment based on a pay rate of 5.5% or chosen product rate +2% (whichever is the higher of the two) for higher rate taxpayers, or 125% of the mortgage payment based on a pay rate of 5.5% or chosen product rate +2% (whichever is the higher of the two) for basic rate taxpayers.
- Earned income can be taken into account to supplement rental income if the rental income covers at least 125% of the mortgage payment based on a pay rate of 5.5% or chosen product rate +2% (whichever is the higher of the two) for higher rate taxpayers, or 115% of the mortgage payment based on a pay rate of 5.5% or chosen product rate +2% (whichever is the higher of the two) for basic rate taxpayers
- Your client can apply for a mortgage on a wholly repayment basis, wholly interest only basis or a mixture of the two.
- BTL’s will be stressed on I/O even if the application is on a repayment basis, providing the applicant appears to have the means to support the higher monthly payment ( monthly surplus and a good credit file/ evidence maintained a repayment mortgage with their current lender).
Let to Buy
- Letting of current property to purchase a residential is acceptable. A new residential mortgage can be considered where the applicant wishes to retain their current property on a BTL basis.
- We need to be satisfied that the existing mortgage will be converted to a permanent letting arrangement and we require:
-Rental coverage of 145%@ 5.5% (higher rate tax payer) or 125 at 5.5% (basic rate tax payer) or chosen product rate + 2% (whichever is the higher of the two).
-Anticipated rental income must be confirmed and may be required to be evidenced by a letting agent.
- The let to buy would need to be self financing based on the Society's ICR - 145%@ 5.5% (higher rate tax payer) or 125 at 5.5% (basic rate tax payer) or chosen product rate + 2% (whichever is the higher of the two). If the residential mortgage application is also submitted to the Society we would ensure that any other buy to lets are also self financing based on 145%@ 5.5% (higher rate tax payer) or 125 at 5.5% (basic rate tax payer) or chosen product rate + 2% (whichever is the higher of the two).
- Any shortfall must be included in affordability calculation for the residential.
- No family members, DWP, multiple tenancies, holiday lets, House with Multiple Occupancies, company lets or student lets
Acceptable tenants - non-relatives and family members who are not Spouse, Parent, Grandparent, Sibling, Child or Grandchild.
We do not accept applications from portfolio landlords (an applicant who currently owns 4 or more mortgaged buy to lets, or as a result of this application will own 4 or more mortgaged buy to lets)
Our products offer one free valuation for properties valued up to £500,000
Interest Only Repayment Vehicle
- Sale of security property, sale of background properties with sufficient equity, investments, ISAs
- Please note investments must have been in place for minimum 12 months prior to application, evidence will be required on application.
Additional borrowing is not available for debt consolidation above £30,000 or for tax, VAT, gambling debts and business purposes
All subject to assured shorthold tenancy agreements. 6 months minimum/12 months maximum term for a tenancy agreement.
- Both freehold and leasehold are acceptable for houses
- Freehold flats/maisonettes are not acceptable- leasehold only.
- Flying freeholds – please refer.
For leasehold, there must be a minimum of 85 years unexpired lease at the start of the mortgage and 55 years unexpired lease remaining at the end of the mortgage term.
CCJ’s & Defaults
CCJ’s/Defaults within the last 3 years are not acceptable. CCJ’s/Defaults => 3 years prior to application are acceptable up to a maximum £2,500, subject to an explanation and being cleared/fully satisfied 12 months prior to application.
No other adverse entries must show on credit file.
Missed/ Late Payments
- Mortgage, Loan, HP arrears and missed payments within the last 3 years are not acceptable. Mortgage, Loan and HP arrears & missed payments => 3 years prior to application, status 1’s and 2s are accepted – status 3 or above not accepted.
- Credit Card, Mail Order, Utility commitments => 3 years prior to application – status 1’s acceptable, status =>2’s acceptable subject to commitment being up to date for a period of 12 months prior to application.
- Credit Card, Mail Order, Utility <3 years prior to application – Status 2 – ok to proceed subject to the commitment being up to date for a minimum of 12 months prior to application. =>Status 3 are ok subject to commitments totalling =<£500 and being up to date for a minimum of 12 months prior to application.
The Society will lend to EEA Nationals subject to having resided in the UK for the previous 2 years.
For non EEA Nationals, specific authority to enter and to work in the UK is required: Applicant(s) has lived in the UK for a minimum of 2 years and has proof of indefinite leave to remain in the UK.
First Time Landlords
- First time landlords are acceptable (must be second time buyer)
- The Society does not accept first time buyers, unless they are residing with partner but purchasing buy to let jointly and have never needed to purchase residential in their own name.
- If applicant is converting their current residential into buy to let and moving in with partner, this is acceptable.
- If applicant is converting their current residential into buy to let and moving into rented accommodation to be in a better position for onward residential purchase, this is acceptable.
Employed/ Self Employed/ Retired
At the time of the application, applicants should be in permanent employment.
We may consider applicants who have recently taken up new employment, providing it is the same occupation and no employment gaps have occurred.
Pension income is acceptable.
For applicants on fixed term contracts please refer with full details.
Agency or temporary workers are not considered.
Directors with a shareholding of more than 25% will also be classified as self employed.
Portfolio Landlords are not accepted (four or more mortgaged properties).
3 years accounts and 3 years SA302’s/Tax Computations are required.
Credit score is not used, and instead we do a manual assessment of data, but we must be able to find a credit footprint.
Bankruptcy/ IVAs/ Debt Management
Bankruptcy (including discharged), IVAs and debt management plans are not acceptable
Cannot accept applications from applicants who have had a property previously repossessed.
Referral required if applicants have previously taken payday loans.
Evidence of deposit
Evidence of the source of deposit is required
- Gift letter with identification required.
- Family gifted deposits are acceptable from the following family members: spouse, parent, grandparent, sibling, child or grandchild.
- Gifted deposit of cash from spouse not party to mortgage is acceptable subject to independent legal advice.
- Gifted deposit of equity subject to referral
- Minimum earned Income of £25,000 from employment, self-employment, pension or investments is required.
- Proof of income:
 Employed: 3 months payslips and P60
 Self employed 1 years accounts/SA302s/Tax Computations
-  Pension: annual penson letter or P60
-  Investment/property income 1 years SA302s/Tax Computations
Minimum Property Value
£125,000 or product specific
- Properties in England and Wales
- Properties must be of traditional construction.
- Timber framed properties may be considered if brick clad.
- Purpose built and converted flats and maisonettes are acceptable (new builds not acceptable) up to 65% LTV and must be leasehold.
- Flats/apartments more than 4 storeys – if above 4 storeys, they must be serviced by at least 1 lift. If above 10 storeys, referral to underwriting required.
- No new build flats or houses
- Any construction covered by housing defect legislation such as High Alumina cement, prefabricated reinforced concrete, large panel system, BISF.
- Prefabricated properties, holiday homes, flats above commercial premises, ex social housing flats/maisonettes, studio and basement flats, properties held in trust and sheltered housing.
- HMOs or properties which have previously been HMOs, sale and lease back or properties purchased from the applicants own limited company and commercial properties.
Type of Let
Unacceptable types of let - limited companies, sale and leaseback, regulated buy to lets, corporate lets, sub-letting, to an immediate family member.