Mortgage lending criteria

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

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

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.

For applications with large amounts of ‘other income’ such as bonus, overtime and commission, a cap will be applied to the amount of this income used. Continue to key income as you do today and the system will calculate if any cap should apply.

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

For A/- numbers

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.

For 10/ numbers

The first payment is always collected in the month after completion. Initial interest will be included in the first monthly payment from the point of completion to the end of the month. For example:

• If the customer completes on the 15th, interest will be charged from the 15th to the end of the month and the first payment will include this sum plus the normal monthly payment
• If the customer completes on the 5th, interest will be charged from the 5th to the end of the month and the first payment will include this sum plus the normal monthly payment.

If a loan completes towards the end of the month and the chosen payment date is less than 10 working days afterwards, the first payment will be collected on the 10th of the month, and on the chosen payment date thereafter e.g. if completion occurs on the 28th and chosen payment date is the 1st, the first payment will be collected on the 10th of the month and will revert to the customer chosen payment date of the 1st thereafter.