Mortgage lending criteria

Our mortgage promise provides a full mortgage credit score facility using minimal information.

It states how much we can lend, is valid for three months and is subject to a valuation and the information supplied being correct.

This is only available for mortgages in the UK.

The details of the client's bank account from where the mortgage will be paid should be keyed directly via Halifax Intermediaries Online.

There is no requirement to complete a Direct Debit mandate form, but details must be provided before the offer will be issued.

Applications involving finder's fees are not acceptable.

A finder's fee is a fee or commission paid by a seller to a third party (such as an investment club) for finding or introducing a buyer. It does not include the normal fee or commission payable to any estate agent handling the sale.

All loans arranged where the capital element is not included in the monthly payment, including those that are part capital and interest repayment, part interest only, must have a plan in place to repay the capital at the end of the term. This includes new loans, further advances and product transfers.

For more information on interest only applications view our questions and answers page

This requirement does not apply to retirement home plan or buy to let applications.

As a responsible lender, it is important for us to see evidence of the repayment plan for interest only mortgages so documents relating to the repayment plan must be received before a new mortgage offer can be considered.

For further details of shared ownership schemes please select repayment plans

Repayment plans

Your clients must have received a key facts illustration before the application is submitted.

Most of our mortgage products can be combined in one mortgage, with the following exceptions:

• Annual interest products cannot be mixed and matched with daily interest products.
• Flexible.
• New build.
• First time buyer special.
• CAT standard products cannot be mixed and matched with other products.

This is a concession and not a product. We charge a non simultaneous sale and purchase administration fee, currently £63.75 (refunded if existing mortgage is redeemed in 3 months). We will currently pay the fee, however, this offer may be withdrawn without notice.

The criteria that apply depend on the following different circumstances:

Where existing property is for sale - providing that there is no intention to let the property, (sales particulars required), where the existing mortgage is with another lender, the existing mortgage payment can be deducted as a credit commitment. Where the existing mortgage is with the Halifax, both mortgage debts must be within affordability. Evidence of outstanding mortgage debt will be required in the form of a mortgage statement.

Where existing property is to be rented out - the existing mortgage debt may be disregarded providing the rental income covers at least 125% of the annual interest charged on the existing mortgage debt at the Halifax Standard Variable Rate or Halifax Homeowner Variable Rate. The calculation to ascertain whether the debt can be disregarded will be made systemically so it is imperative that the existing debt is still entered as a mortgage commitment. Where the system identifies that the property is self funding the commitment will not be included when calculating the maximum amount of loan available.

In addition to the above the following currently apply:

• Income verification (this is required where there is any new let involved).
• Maximum new loan (to be client's main residence) to value 97%.
• Income discretion is not allowed.
• The new mortgage must be a credit score pass, i.e. not passed on appeal.
• Explanation as to why case is a non-simultaneous.

Current properties already rented out - evidence is required that these are self-financing, unless LTV is below 75% or above 75% for existing HBOS mortgage clients who have held a mortgage account for more than 24 months, when a declaration, by the client, that the mortgages are self-financing is sufficient. Where the case has an LTV above 75%, full underwriting is required.

• Maximum LTV on interest only loans is 75%.
• A mix of interest only and repayment is allowed but the total borrowing must be less than 75% LTV.
• For house purchase and remortgage where the total LTV is over 75% all borrowing must be on a repayment basis.
• Clients taking out a loan above 75% at application stage cannot transfer from repayment to interest only, within the first 12 months of completion of the mortgage.
• New build and further advance applications are subject to a limit of 75% LTV for interest only and 80% LTV for repayment.

Only if discharged and subject to a credit score.

Generally taken into account in credit scoring however background details are required.

All applications will be credit scored. If an application fails it is unlikely to be successful on appeal. If however, you feel it would improve the Halifax's and the client's position, then this can be referred in the usual way through your local processing centre using the Contact us button.

Product transfer applications are not credit scored.

Applications where previous mortgages have been in arrears will be considered on an individual basis, unless previously taken into possession by a lender.

From Thursday 16th February, we are making changes to our acceptable list of interest only repayment vehicles.

We are also making changes to the calculations used for the remaining repayment vehicles.

Changes to acceptable list of repayment vehicles:

The following changes are being made to all new Interest Only (including part Interest Only) Mortgage Applications and Further Advances.

• Cash Savings are no longer accepted as a repayment vehicle for any new Interest Only lending.
• Pensions must have a minimum current value greater than £1 million and up to 25% of the current fund value can be used to support Interest Only lending.
• All other repayment vehicles, or combinations of repayment vehicles, require a minimum current fund value of £50,000 of which up to 80% of the current fund value can be used to support Interest Only lending.

This policy change does not apply to:

• Product Transfers
• Transfers of Mortgaged Property

There is no change to the maximum LTV of 75% on Interest Only.

View full product details

You must provide proof of identity for all mortgage applicants.You must have sight of two original documents for each applicant and complete the certification on page 1 of the Halifax Intermediary Mortgage Application Form with details of the evidence you have seen.

FSA registered firms retain evidence of verification undertaken on their own files and provide details to us on the application system. However, we do not normally require verification documents to be sent to us.

For further details select acceptable documentation

Acceptable documentation

• Maximum lending 75% LTV.
• Product fee £100.
• Intention must be to occupy within 4 years.
• Consent to lease can be granted for first 3 years. Maximum loan amount £2m.
• Remortgages can be considered although cannot be used to capital raise.
• Before the applicants return, the property must be let on a 6 monthly Assured Shorthold Tenancy Agreement.
• Underwriters may request further information to ensure continuation of income once applicant returns.

To qualify for a FTB product, one applicant must not have previously bought or owned a property (including inherited/bought for cash).

These are the original founding members of the EEA. Under the terms of the EEA agreement, all EEA citizens in this category have full rights to enter, live and work in the UK, provided they are able to support themselves without the need for State benefits.

Clients from the above countries will be treated in the same way as a client from a Full EEA member state.

Where the client is not a citizen of one of the countries listed above then the following checks must be completed:

• Applicants must not enjoy diplomatic immunity
• Passport includes indefinite leave to remain - proceed.
• Passport does not include indefinite leave to remain but includes work permit or visa with minimum 2 years 6 months remaining - proceed.
• If not, has the customer lived and worked in the UK for over 3 years (excluding refugees or any period as a student) - proceed
• If not, where work permit has less than 2 years 6 months remaining employer must confirm that they have applied (or intend to apply) for the permit to be renewed - proceed
• If none of the above applies, then the case may not proceed (or could be limited to 75% LTV).
• Please ensure that if the passport has a visa stamp and if this stamp has specific conditions attached that any documents that refer to these conditions are submitted with the passport, i.e. if the visa says ‘As authorised by the secretary of state’ then the work permit and a letter from the employer confirming that they have applied (or intend to apply) for the permit to be renewed are submitted.
• Some Non-EEA nationals may have an identity card issued by the home office in place of a visa, which will confirm the client's right to stay, work or study in the UK. These cards are acceptable.

Refugees

Refugees/asylum seekers must have indefinite leave to remain, which must be verified by the documentation from the Immigration and Nationality Directorate. This will consist of a letter confirming that they have been granted "Indefinite leave to remain". "Exceptional leave to remain" is not acceptable.

Spouse/partner of UK National

Income can be used once they have been granted permanent residency.

The maximum age at the end of the mortgage term is 75 years for all lending.

Future retirement income will need to be verified where the client is within 5 years of their planned retirement or their 65th birthday, whichever is the earliest, and the term exceeds retirement.

For State Pension;

• Latest 1 month bank statement.

For Company or Private Pension:

One of the following

• Latest payslip.
• Latest bank statement.
• Latest pension statement/reference dated within last 12 months.

40 years - repayment, ISA, pension, PEP, endowment and interest only.

• Minimum 18 years.
• Maximum retirement, unless retirement income meets affordability rules.

The maximum age at the end of the mortgage term is 75 years for all lending, with the exception of retirement home plan.

No minimum loan - see lending limits for full details of maximum loan, and minimum valuation for minimum valuation amount.

• Four clients allowed.
• Two incomes are taken into account.
• Discretion used for the third income.

• You must ensure your client(s) have owned their property for at least six months before submitting a re-mortgage application.
• Maximum LTV for remortgages and capital raising is 90% (subject to product availability or unless stated otherwise).

We will not accept any applications where an element of the deposit is provided by way of a Vendors Gift on a second hand property.

For new build properties please see New build

Halifax use affordability as a way of assessing how much they will lend. Please refer to our affordability calculator.

When calculating affordability on interest only loans, Halifax will take into account the monthly premiums payable for the relevant repayment vehicle i.e. existing endowment or new or existing ISA. Please ensure the premium(s) is specified at both AIP and full application.

All applications are subject to satisfactory status checks including credit scoring. If your client does not keep to the mortgage conditions we may set off any money that they owe us against a credit balance in any account they hold with us, including a joint account.

• Credit commitments with over 3 months to run.
• Shared ownership.
• Rent.
• Maintenance payments.

Agency workers

This is not normally considered, however, exception may be possible if evidence of 18 months continuous employment through agencies/similar employment can be proved. 18 months employment references required.

IT contractors

For all IT contractors whether employed, self-employed or utilising an umbrella company, we will accept the gross value of the contract as evidence of income. For information on term of employment follow sub contractor rules.

Probation

If your clients are part of an employee probationary period then key ‘probationary' as the contract type and subject to an accept result at DIP / full application we can proceed.

Short term, renewable, fixed and rolling contracts

These can be considered. 2 years remaining on contract proceed without referral, if less refer to intermediary sales centre.

Sub-contractors

Applicants must have been sub-contracting for a minimum of 1 year or employed in a similar business. If they sub-contract for 1 company and are not responsible for paying their own tax, treat as employed. If they are responsible for paying their own tax and/or subcontract for more than 1 company, treat as self employed.

Typically the following allowances are taken into consideration when assessing income:

Further guidance on the information required within the documents can be found in the income documentation section.

The documents required to evidence income are shown below.

Please note you are required to accurately input the customer's income and verification of this may be requested.

Income documents

• Generally, 18 months history collected if clients have had more than 3 jobs in last 18 months.
• If self employed 3 years history is required.

If your clients have a shareholding of 25% or greater share in the company through which their income is derived, we treat them as self employed.

If client's shareholding is not 100%, there is a need to establish if declared net profit is the full 100% or client's share of profit. We require verification of 3 years income by way of SA302s, accountants reference or accounts.

For limited companies we use the combined figures of dividends plus salary drawn.

Applications that involve a distressed sale or a sale and leaseback are not acceptable.

If leasehold, the property must have an unexpired term of more than 70 years at application.

See below for variations to the limits set within this table

• The maximum loan on an interest only basis is 75%.
• The maximum loan for new build 80%.
• The maximum loan to value limits for a second home loan or buy to let scheme is 75% (65% for newbuild properties).
• The maximum loan for the expatriate mortgage schemes is 75%.

Loans on mortgage free properties must be keyed as 'Home Movers' and the customer is only eligible for the Home Mover range of products and not remortgage products or incentives. Free legals are not available for these applications. Refer to the appropriate product range:

How to key

To ensure that loans on mortgage free properties are processed correctly, the case should be keyed as follows:

1. Select 'Home Mover' in the dropdown list for Customer Type.
2. Under Residential Type select 'Homeowner - Mortgage Free'.
3. Enter the customer’s estimated valuation for Purchase Price.
4. Enter Source of Deposit as 'Equity' from the dropdown list.

A valuation fee will be payable on these applications.

Note: The property must have been registered in the applicant’s name (or at least one of the applicants' names) for a minimum of six months.

An initial occupancy/new build property is classed as any property being occupied and/or sold for the first time on the open market in its current state. These will fall into one of the following categories:

• Newly built property.
• Refurbished property i.e. refurbishment of an existing residential property, typically a re-furbished property will be considered as initial occupancy where the vendor is a builder/developer and the property has been vacated to allow for the refurbishment to be undertaken.
• Newly converted property i.e. conversion of an existing non residential property, e.g. an existing mill converted into flats.
• All lending decisions are based on valuation or purchase price (whichever is lower) apart from new build which are processed on valuation.
• A property, either new or converted (as above), that has been tenanted through a 'try before you buy' or 'rent before you buy' scheme and is now offered for sale by the builder/developer.

Maximum LTV on new build properties (houses and flats) is 80% (65% if the scheme type is a second home loan or buy to let).

Builder cash incentives include but are not limited to deposit contributions, cash-backs, contribution to legal fees/stamp duty, mortgage subsidies.

Builder cash incentives will typically be acceptable provided the value of these does not exceed 5% of the lower of purchase price/valuation. Cash incentives in excess of this amount may result in a reduction in the maximum loan available. All builder cash incentives must be declared at the point of sale.

Cash incentives for shared equity applications are acceptable provided the total value of the loan plus incentive together does not exceed 95% of the value of the equity share being purchased.

The remortgage service is available on most, but not all, of our remortgage products. Where your client uses our remortgage service, we will pay our conveyancer’s legal fees, any registration fees and, if the property is leasehold, their landlord's fees for answering our conveyancer's enquiries.

Your client will have to pay any fees their existing lender may charge in connection with repaying your clients current mortgage.

These include your client's existing lender's conveyancer's fees if the existing lender does not allow our conveyancer to act for them too. Halifax conveyancer's may be able to offer to do extra legal work for your client at the same time as the remortgage (not in Northern Ireland). If your client decides to use them, they will make a separate charge for the extra work and your client will have to pay for it. Your client should ask about the charge before asking the conveyancers to do any extra work for them.

Your client can choose their own conveyancer to act. Please note also that our remortgage service is not available with some of our remortgage products and your client will have to choose their own conveyancer to act if they decide to have one of these products. This conveyancer will act for Halifax in the remortgage, provided they are on our panel of conveyancers, and your client must pay the legal charges, and any search fees, registration fees or other costs, whether or not the matter goes ahead. The search insurance facility will not be available.

Please be advised that the remortgage service is not available for clients who are capital-raising on a mortgage-free property. These clients should be offered 'homemover' products and must therefore:

• Pay the relevant valuation fee.
• Arrange and pay for their conveyancing.

They will be entitled to the relevant 'homemover' product and any associated incentive.

Applications involving finder’s fees are not acceptable. A finder’s fee is a fee or commission paid by a seller to a third party (such as an investment club) for finding or introducing a buyer. It does not include the normal fee or commission payable to any estate agent handling the sale.

With effect from Thursday 18th August 2011, the RHP scheme will only be available to existing RHP clients who are moving home.

Key changes

• We will no longer accept RHP applications for new clients.
• Existing clients will no longer be able to transfer onto RHP.
• Existing RHP clients who wish to move home will have the option of one product in the range.

A retirement home plan mortgage is a lifetime mortgage scheme conducted on an interest only basis. No deduction is made in the affordability calculations for the cost of an investment.

Retirement home plan has been classed as a lifetime mortgage scheme by the FSA so is subject to the specific sections of MCOB.

Once a mortgage application has been made, if the property to be mortgaged changes, and the clients original mortgage product has been withdrawn, a new product from the current range must be selected

Loans may be accepted up to 100% of the discounted purchase price, provided that they do not exceed Halifax lending limits based on valuation.

Home improvements allowed - for funds to be released we require sight of invoices, alternatively a retention will be made at completion; funds will then be released on production of invoices.

• Are acceptable but the construction, whether by the client or self build group, must be monitored by a suitably qualified consultant employed by the client/group who will provide the necessary construction certificates.
• Flats, maisonettes and semi-detached properties are not accepted.
• We will consider a maximum LTV of 80% of the valuation figure subject to normal lending limits.
• The loan is released in installments (first always to conveyancer) subject to the interim value determined by our valuer and receipt of an interim certificate from the consultant. A minimum of 10% of the loan is retained until the property is complete. A final valuer inspection is required together with a Final Certificate from the consultant.
• Client must be able to buy the plot and proceed with building works up to the appropriate stage before the first installment is released.
• We do not accept a remortgage of a self build property whilst it is part way through construction.

Lets your clients buy a home by sharing the equity with a third party.

• Halifax must have first charge, the seller secures their interest by way of a second charge.
• We will consider lending up to 95% of the value of the share that is being purchased.
• Client must pay a 5% personal deposit towards the purchase of the share (excluding any deposit provided by a builder or housing association).
• The mortgage must be on a repayment basis. (A request to transfer to a full/part interest only basis as a means of reducing outgoings for customers in financial difficulties may be considered.)

Shared equity (HomeBuy) in England

Shared equity (HomeBuy) in Wales

Shared equity (HomeBuy) in Scotland

A staged purchase scheme for house buyers in England

Maximum 90% of share, subject to mortgage protection clause or section 442 agreement; maximum 75% if no clause/agreement. Minimum share - 25%. Conveyancer to confirm acceptability. Verbal confirmation is required from Housing Association confirming if mortgage protection clause in lease.

The mortgage must be conducted on a full repayment basis.

The facility to transfer the mortgage to full or part interest only is not available whilst the mortgage is conducted on a shared equity or shared ownership basis.

The Government's HomeBuy initiatives have introduced two types of shared ownership schemes:

• New build HomeBuy - for key workers, existing tenants and those in need.
• Social HomeBuy - for tenants buying their own home.

New build HomeBuy

Social HomeBuy

Sub-sales and back-to-back transactions are not acceptable.

A sub-sale occurs when a property is bought and then sold on within six months, i.e. the borrower is buying the property from someone who has themselves bought the property less than six months before. The date of registration at the Land Registry is how we determine the length of ownership.

This means that the current vendor must have owned the property for at least six months before we can accept an application to purchase that property.

A back-to-back transaction is a type of sub-sale where the intervening seller buys from the original seller and sells on to the borrower on the same day or within a few days. We also regard as sub-sales, cases where the seller acquires the freehold (or superior leasehold) title to the property, which they then immediately sell on to the borrower by the grant to them of a lease (or sub-lease).

The following cases are exceptions where it is acceptable for the property to be sold on within six months of acquisition by the seller.

Where sales are by:

• A personal representative of the registered proprietor; or
• An institutional mortgagee exercising its power of sale; or
• A receiver, trustee-in-bankruptcy or liquidator; or
• A developer or builder selling a property acquired under a part-exchange scheme.

Applications which involve assignable contracts or irrevocable powers of attorney in favour of intervening sellers are not acceptable. Any other structure to the transaction which has a similar effect should be reported to us.

• No freehold flats.
• Studio and basement flats acceptable, subject to valuer's comments. No limit to acceptable number of floors, subject to valuer's comments.
• Unacceptable construction - most precast reinforced concrete without an approved repair or repair plan.

The minimum valuation amount for all lending is £40,000.

Tracker rates are linked to the Bank of England bank rate. This is announced from time to time by the Bank of England's Monetary Policy Committee (MPC). If the MPC decides to change the bank rate, we will change the tracker rate in line with it. This will be within 30 days of the publication of the minutes of the MPC meeting at which the decision to change the bank rate was made.

At the end of the tracker rate period the tracker rate mortgage will cease to be a tracker rate mortgage and we will charge your client interest at:

• Halifax Homeowner Variable Rate - for mortgages applied for after 4th January 2011.
• Halifax Standard Variable Rate - for mortgages applied for before 4th January 2011.

Unless we write to tell them that we are prepared to allow the mortgage to remain a tracker rate mortgage.

All variable rates are stated at their current levels and are subject to change.

Some of our products have early repayment charges attached to them. An early repayment charge will apply if your client takes a product transfer or repays some or all of their mortgage during the early repayment charge period.

If your client chooses a mortgage product with early repayment charges, as a concession, in any period of 12 months, your client may repay up to 10% of the amount outstanding on their product, without having to pay an early repayment charge. We reserve the right to change or withdraw this concession.

More details available on the 'Further advance and product transfers lending criteria' page.

This is the reversionary rate that will apply to the mortgage after the initial product period ends. Halifax Homeowner Variable Rate will apply to all mortgages applied for on or after 4th January 2011. Before this date the Halifax Standard Variable Rate will be the rate that applies

It is not available for selection for new applications, further advances and product transfers. It will vary in relation to market conditions. Halifax Homeowner Variable Rate is not linked to the Bank of England bank rate.

This is currently used as a reversionary rate for mortgages applied for before 4th January 2011. It is not available for selection for new applications, further advances and product transfers. It will vary in relation to market conditions.

Depending on when in the month your client takes out the mortgage, we will collect initial interest, together with first and subsequent payments as follows:

Mortgage taken out on 1st - 9th

We will collect initial interest 14 days after the date of completion. We will collect the first monthly payment on the client's preferred payment date in the month following the month of completion. Subsequent monthly payments will be collected on the client's preferred payment date each month after that.

Mortgage taken out on 10th - 17th

We will collect initial interest and the first monthly payment on the client's preferred payment date in the month following the month of completion. Subsequent monthly payments will be collected on the client's preferred payment date each month after that.

Mortgage taken out on 18th - 31st

We will collect initial interest and the first monthly payment 14 days after the date of completion. We will collect the second monthly payment on the client's preferred payment date in the 2nd month following the month of completion. Subsequent monthly payments will be collected on the client's preferred payment date each month after that.

Overpayments

Lump sum or regular overpayments can be made at any time. If early repayment charges apply to the product, refer to early repayment charges for more details. Please also see section on flexible mortgages.

Payment holidays

Payment holidays can be requested providing the account is no more than one month in arrears and is at least three months old and:

• No payment arrangements have been made in the last six months.
• The total outstanding debt does not exceed the maximum lending limit for the type of loan.
• No second mortgage or subsequent charge has been registered from another lender.
• Your client is not currently claiming on mortgage repayments insurance policies.
• Where your client already has a Halifax homeowner loan secured on the property, the projected mortgage debt plus the amount due under the homeowner loan is no more than 95% of our indexed valuation of the property.

Payment holidays only apply to the monthly mortgage payment. Interest is charged during a payment holiday. Insurance, life assurance and mortgage repayments insurance must continue to be paid. At the end of the payment holiday a new monthly payment will be calculated on the total mortgage debt including the suspended payments.

If a product is portable this is outlined in the original mortgage offer and supporting documentation.

To port a product the new mortgage application must be received before the current mortgage is redeemed and completion must be simultaneous.

Where Halifax Standard Variable Rate is the reversionary rate which applies to the product being ported, it will continue to be the reversionary rate for the amount of the new mortgage which is on the ported product.

Any extra amount borrowed on the new mortgage must be on a current product and the reversionary rate which applies to that product and the amount on it will be Halifax Homeowner Variable Rate.

Flexible products, BTL products and reversionary rates are not portable.

Applications will only be considered where the party to be removed from the mortgage will no longer reside in the mortgage property.