Lending Policy Changes 31/01/2020

Broker feedback is important and we strive to ensure that we continuously develop and improve our offering. Following a review of our lending policy, we are pleased to confirm that on Friday 31 January 2020, the following changes will be implemented.

Changes to our lending policy

Interest only

• Maximum term 25 years
• The mortgage term is limited to the sooner of the applicant’s declared retirement age (including income and non-income earners) or the applicants 70th birthday
• In addition to our existing policy, changes to our repayment vehicles for Interest Only are:
• Endowment policy and Pension provision – projections should be based on the lower or middle growth rates, as deemed appropriate to comply with responsible lending

Shared Ownership

• Applications are permitted where either a 2015 or later model lease is in place

Capital raising for business purposes

• If all applicants have an interest in the business, independent legal advice is strongly recommended
• If all applicants do not have an interest in the business, independent legal advice will be required

Remortgage

• Permitted 9 months after the original purchase date of the security (registered proprietorship)

Self-build

• Where a borrower intends to reside in rented accommodation during the build stage, any rent payments will not be included with the affordability assessment if the underwriter deems that savings are sufficient to cover this cost

Parental leave

• Income may not be considered where the applicant does not declare they will be returning to work

Additional requirements for income multiples

• Sole – multiples above 4.5x will be capped at 85% LTV
• Joint – multiples above 4.5x will be capped at 85% LTV

Maintenance income

• Maximum 80% LTV where maintenance is the only income source

Important information

Pipeline cases will be progressed and will remain unaffected by these changes.