Mortgage lending criteria

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Find out all about our lending criteria for new clients

You can search our lending criteria - enter the phrase or term you're looking for and click on the search button - or view our printable version.

This section offers you an overview of our lending criteria for new clients. Whilst we aim to cover all relevant information, this criteria does not detail all our requirements and for anything you are unable to find, contact your BDM.

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Application process 

 Interest only repayment methods

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.

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

The table below shows the repayment plans we accept and the evidence required in each case. It also shows the methods we use to assess whether a repayment plan meets our lending criteria. This information is only a guide. A mortgage offer will only be issued once we have confirmed that the evidence supplied meets our criteria.

Repayment plan Evidence required Assessment method

Endowment (UK)


Both with profits and unitised plans.

Copy of latest projection statement dated within last 12 months.

Endowment companies will present three growth rates to a customer with the middle one (for example 6%) being the most likely projected outcome. We allow up to 100% of projected amount using the middle % figure.

Stocks and Shares ISA (UK)


Only shares quoted within the FTSE index held in sterling are acceptable


Copy of share certificates, nominee account statement or confirmation from a recognised stock broker containing evidence of share holdings together with their valuation.

Copy of latest statement dated within last 12 months.

We will compare the value of the ISA/OEIC/Investment Bond with the amount of interest only lending required, taking into account the remaining term of the mortgage and future market volatility.
The valuation we will assign to the investment is 80% of the current value which must be greater than £50000. The total can be made up of a combination of Stocks and Shares ISA, Unit Trusts, Investment Bonds and Stocks and Shares.

Stocks and Shares ISA (UK)


Only UK based investments quoted within the FTSE index held in sterling are acceptable

Copy of share certificates, nominee account statement or confirmation from a recognised stock broker containing evidence of share holdings together with their valuation.

See Stocks and Shares ISA.

Pension (UK)

Copy of latest statement dated within last 12 months.

For the purposes of backing an interest only mortgage, a maximum of 25% of the current fund value with the current value to be greater than £1 million. Where customers are on a final salary pension scheme the lump sum can be used if the current value is greater than £250,000. Pensions can be combined to reach the £250,000 and there is no need for confirmation of the full fund value.

Sale of other residential property (UK)


Due to valuation and verification requirements this is restricted to properties within the UK.

Completed interest only - other residential property form and, if the mortgage lender is outside Lloyds Banking Group, a copy of the latest mortgage statement dated within last 12 months.

We will check the ownership of the other residential property and assess its value (Ownership of the other residential property must be in the same name as the applicants). We will compare the equity available in the property with the amount of interest only lending required. Current equity within the property must be over £50,000. We will use 80% of the current equity value of the property to support interest only lending. Please note that there is a minimum greater than £50,000 equity requirement for each individual property being used to support Interest Only lending.

Sale of other Residential Property (not yet purchased) (UK)


Due to valuation and verification requirements this is restricted to properties within the UK.

Property details, Acting Solicitor to confirm intended ownership of the second property, details of any loans to be secured against this property (Property valuation and land registry search carried out by us if needed).

We will confirm the intended ownership of the second property prior to offer on the new mortgage / further advance. Current equity within the property must be over £50,000. We will use 80% of the current equity value of the property to support Interest Only lending. Please note that there is a minimum greater than £50,000 equity requirement for each individual property being used to support Interest Only lending.

Important points on the assessment:
  • We are not providing advice on your client's repayment plan(s) or making any guarantee that their plan(s) will be sufficient to repay the outstanding balance (capital) at the end of the mortgage term.
  • Your client should review their plan(s) regularly during the term of their mortgage to make sure it is on track to repay the outstanding balance.
  • Periodically, we will ask your client to provide evidence of their repayment plan(s). If your client is unable to satisfy us that their repayment plan(s) remains on track to repay the outstanding balance on their mortgage, we may ask your client to transfer some or all of their mortgage onto a capital and interest repayment basis.
  • Please remember it is your client's responsibility to ensure they have sufficient funds to repay their outstanding balance at the end of the mortgage term. If they are unable to do so, their home may be repossessed to repay the outstanding balance.
Important points on repayment plans:
  • Repayment plans CANNOT be accepted if they include the name of anyone NOT named on the mortgage.
  • Your client can use more than one repayment plan to cover their total interest only amount. In this case, please send the relevant evidence for all repayment plans.
  • The following are NOT acceptable repayment plans:
    • Sale of main residence.
    • Sale of other commercial property.
    • Sale of non property assets.
    • Inheritance.
    • Bonuses.
  • Maturity dates will be requested for each applicable repayment plan

Only repayment vehicles for those customers intending to live at the mortgaged property may be used to support the loan. E.G. if a parent is named on the mortgage to help with affordability then a property in the parents name cannot be accepted as a repayment vehicle.


Income 

 Income verification

EMPLOYED CATEGORIES

Income/Contract Type Verification document (preferred shown first alternative shown below) Criteria
Additional Duty Hours

Latest 3 payslips, (this applies whether the applicant is paid weekly or monthly)

*Hand written payslips are not acceptable*

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Employers Reference

On occasions where the customer is unable to provide our preferred documentation, we are able to request an employer's reference to verify the income

Additional Responsibility Allowance can only be used if evidenced that it is a permanent feature and guaranteed for the duration of the loan

Letter from employer

must confirm customer name, monetary value of the allowance and details of the period it will be paid for (no end date or an end date after the mortgage term expires would be acceptable)

Basic Salary (Including applicants on permanent contract with probationary period)

Latest payslip, (this applies whether the applicant is paid weekly or monthly)

*Hand written payslips are not acceptable*

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Employers Reference

On occasions where the customer is unable to provide payslips that fit the listed criteria, we are able to request an employer's reference to verify the income

Bonus

See Overtime, bonus, commission

Bursary (can only be used when keyed in addition to a basic income)

Letter of Confirmation from Payer

must show applicant name & monetary value of allowance

Latest full month Bank Statement

customer full name or initial & surname, account number, receipt of payment, bank heading/name & http address for internet statement

Cabin Crew/Flight Attendants - Pay/Allowances

Cabin crew income is a mix of basic pay and a high level of additional pay known as "Flight Pay" or "Flight Allowance".

You should enter the total additional pay/allowances under Additional Duty Hours within Other Income, using an average of the last three months to calculate the annual amount.

Latest 3 payslips, (this applies whether the applicant is paid weekly or monthly)

*Hand written payslips are not acceptable*

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Employers Reference

On occasions where the customer is unable to provide our preferred documentation, we are able to request an employer's reference to verify the income

Car Allowance

See Town, Area & Car Allowance

Child Benefit (key as Child Tax Credit)
(must not be used for any application that includes a customer on a gross income of £50,000 or more)

Latest Bank Statement

customer full name or initial and surname, account number, receipt of payment for child benefit, bank heading/name and http address for internet statement

Latest Benefit Award Letter (dated within the last 12 months)

must show applicants name and address and relate to current tax year.

Child Tax Credit/Working Tax Credit

Latest award letter from HMRC (all pages)

must show applicants name & address and relate to current tax year. Income declared to Inland Revenue for calculating the awarded amount must match the income keyed on the application otherwise the letter is unacceptable.

If the letter is in joint names, the income can be keyed for either applicant but both must be party to the mortgage.

Latest full month Bank Statement

customer full name or initial & surname, account number, receipt of payment for CTC/WTC, bank heading/name & http address for internet statement

CIS Contractors If Company Paying Tax should be keyed as employed providing they can confirm 12 months or more continuous employment with 6 months of the contract remaining or 2 years continuous service (for the last two years as at the date of application) in the same type of employment

Latest 6 months payslips/invoices and corresponding bank statements

payslip/invoice must show applicant & employer name, pay date, basic income, gross & net pay bank statement must show customer full name or initial & surname, account number, salary amount credited, employer name & bank heading/name & http address for internet statement

Employers Reference

On occasions where the customer is unable to provide our preferred documentation fitting the listed criteria, we are able to request an employer's reference to verify the income

CIS Contractors
If Customer Paying Tax, has more than one contract or is employed by a Limited company he/she has set up

See self employed income verification

Commission

See Overtime, bonus, commission

Contractor - If applicant earns more than £500 per day or £75,000 per annum
 (For all other types of contractor please see Fixed/short term/Agency contracts)

Copy of the contract

All applicants must have a current continuous employment of 12 months or more with 6 months of the contract remaining or 2 years continuous service (for the last two years as at the date of application) in the same type of employment.

Council Tax Benefit

N/A

N/A

Disability Living Allowance

The following income types should be entered as 'Disability Living Allowance':

Attendance allowance Constant Attendance Allowance (CAA) Constant Carers Allowance Carers Allowance (CA) Disability Living Allowance Incapacity benefit Employment & Support Allowance Severe Disablement Allowance (SDA) Industrial Injuries Disablement Benefit (Accidents & Diseases) Mobility Payments - these can only be included if they are part of any other disablement benefits. Thalidomide Trust Income

DLA Award Letter

must be dated within the last 12 months, show applicant name & monetary value of allowance

Latest full Bank Statement

customer full name or initial & surname, account number, receipt of payment for DLA, bank heading/name & http address for internet statement

DWP or Income Support

N/A

N/A

Employed in a Family Business
If Less than 25% Invested interest (treat as employed)

Latest payslip & corresponding bank statement

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Latest SA302

original SA302's on headed paper are acceptable. Prints of the online SA302 are NOT acceptable. The year the SA302 relates to and customers name/initial & surname must be shown. SA302's can be obtained by contacting HMRC

Employed in a Family Business
Equal to or greater than 25% Invested interest (Treat as Self Employed)

Last 3 years SA302's

original SA302's on headed paper are acceptable. Prints of the online SA302 are NOT acceptable. The year the SA302 relates to and customers name/initial & surname must be shown. SA302's can be obtained by contacting HMRC

Full Accounts

must be finalised, signed by the accountant and clearly show the net profit (for sole traders), share of net profit (for partnerships) or salary & dividends (for director of Limited company). Profit & Loss statements alone are NOT acceptable

Fixed / Short Term / Agency Contracts
If applicant paying own tax should be keyed as self employed

See self employed income verification

Fixed / Short Term/Agency  Contracts

If Company Paying Tax (Excluding CIS contractors) should be keyed as employed providing they can confirm 12 months or more continuous employment with 6 months of the contract remaining or 2 years continuous service (for the last two years as at the date of application) in the same type of employment

Latest payslip, (this applies whether the applicant is paid weekly or monthly).

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Employers Reference

On occasions where the customer is unable to provide payslips that fit the listed criteria, we are able to request an employer's reference to verify the income

Flexible Benefits (we accept 100% of this as a form of main income & should be keyed as basic income)

same as evidencing Basic Income

Foster Care Allowance (Only portion of allowance that is taxable can be used as income)

Last 3 years SA302’s

original SA302's on headed paper are acceptable. Prints of the online SA302 are NOT acceptable. The year the SA302 relates to and customers name/initial & surname must be shown. SA302's can be obtained by contacting HMRC

Holiday Pay

Latest payslip, (this applies whether the applicant is paid weekly or monthly)

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Employers Reference

On occasions where the customer is unable to provide payslips that fit the listed criteria, we are able to request an employer's reference to verify the income

Housing Benefit

N/A

N/A

IT Contractors - refer to fixed/short term contracts, company paying tax

Copy of the IT Contract

All applicants must have a current continuous employment of 12 months or more with 6 months of the contract remaining or 2 years continuous service (for the last two years as at the date of application) in the same type of employment.

Employers Reference

On occasions where the customer is unable to provide our preferred documentation, we are able to request an employer's reference to verify the income

Maintenance Income (including adoption & guardian allowance)

Bank Statements (latest 3 consecutive full months)

customer full name or initial & surname, account number, receipt of payment, bank heading/name & http address for internet statement

Court Order (minute agreements for maintenance income are not required to be sealed) Maintenance Assessment Letter from Child Support Agency (CSA)

Must show applicant name & monetary value

Maternity Pay providing the applicant will return to work on the same terms.

Latest payslip received prior to commencement of maternity leave or latest payslip where annual salary is clearly displayed

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Employers Reference

On occasions where the customer is unable to provide our preferred documentation, we are able to request an employer’s reference to verify the income.

New Job, Payrise or Promotion Income/higher income can be keyed on application

Employers Reference (if new income amount is not already shown on latest payslip)

Payslip must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Nursing Bank

Latest 3 payslips, (this applies whether the applicant is paid weekly or monthly)

*Hand written payslips are not acceptable*

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Employers Reference

On occasions where the customer is unable to provide our preferred documentation, we are able to request an employer's reference to verify the income

Overtime Bonus Commission (must represent a regular and sustainable feature of the applicant's income) (Deferred bonuses are usually conditional and may not be guaranteed. Bonuses must not be keyed onto MSP unless they have already been paid out)

If received weekly, monthly or quarterly, then latest 3 payslips/last quarterly bonus payslip. If received annually, then either latest payslip showing bonus or latest P60

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Employers Reference

On occasions where the customer is unable to provide payslips that fit the listed criteria, we are able to request an employer's reference to verify the income

Piecework Contract

N/A

N/A

Rental Income (If the property is to be let)

Letter from Letting Agent

must be on company headed paper, addressed to applicant & confirm expected rental payment

Rental Income (If the property is already let)

3 months consecutive bank statements Tenancy Agreement (current) Letter from Letting Agent OR Letter from accountant or solicitor

customer full name or initial & surname, account number, receipt of rental income, bank heading/name & http address for internet statement must show applicants name, rental period & rental payment must be on company headed paper, addressed to applicant & confirm property address, rental payment & that the property is currently rented

Retirement State/Company Pension Tax Credits War Pension

Latest month full Bank Statement

customer full name or initial & surname, account number, pension amount credited, pension provider name & bank heading/name & http address for internet statement

Latest payslip, pension statement or P60 (dated within 12 months)

P60 - must be dated within the last 12 months, show applicant name, company name & income amount
On occasions where the customer is unable to provide our preferred documentation fitting the listed criteria, we are able to request an employer's reference

Retirement Private Pension

Pensions Statement

must show applicant & employer name, pay date, basic income, gross & net pay

Seasonal Contract

N/A

N/A

Shift Allowance

Latest payslip, (this applies whether the applicant is paid weekly or monthly)

*Hand written payslips are not acceptable*

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Employers Reference

On occasions where the customer is unable to provide a payslip that fits the listed criteria, we are able to request an employer's reference to verify the income

Stipend (we accept 100% of this as a form of main income & should be keyed as basic income)

Letter of Confirmation from Payer

must show applicant name & monetary value of allowance

Supply Teacher (where the customer has current continuous employment of 12 months or more and has 6 months remaining or the customer has at least 2 years continuous service (for the last 2 years as at the date of application) in the same type of employment, income can be used

same as evidencing Basic Income

Temporary Contract

N/A

N/A

Town, Area or Car Allowance (excluding mileage allowance)

Latest payslip, (this applies whether the applicant is paid weekly or monthly)

*Hand written payslips are not acceptable*

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Employers Reference

On occasions where the customer is unable to provide a payslip that fits the listed criteria, we are able to request an employer's reference to verify the income

Trust Income

N/A

N/A

Widows Allowance/State Widows Pension (should be keyed as shift allowance)

Latest month full Bank Statement

customer full name or initial & surname, account number, pension/allowance amount credited from DWP & bank heading/name & http address for internet statement

DWP Award Letter (dated within last 12 months)

must be dated within the last 12 months, show applicant name & monetary value of allowance

Widows Private Company Pension (should be keyed as retirement income)

One of the following dated within 12 months: Payslip, Pension Statement or P60

Payslip must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability Pension statement must show applicant & pension provider name, pay date, gross & net pay P60 must be dated within the last 12 months, show applicant name, company name & income amount

Working Tax Credit

See Child Tax Credit/Working Tax Credit

Zero Hours Contracts The income should be keyed as the income earned over the last 12 calendar months.

The customer must have been employed on a zero hours contract for a minimum of 12 months (same employer OR same type of work but different employers)

12 months payslips

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

P60 plus subsequent payslips to cover the full 12 month period

OR

Employers Reference

P60 - must be dated within the last 12 months, show applicant name, company name & income amount

On occasions where the customer is unable to provide our preferred documentation fitting the listed criteria, we are able to request an employer's reference to verify the income

SELF EMPLOYED CATEGORIES

Income/Contract Type Verification document (preferred shown first alternative shown below) Criteria
Ltd Company – Director/Shareholder - less than 25% Wanting to use basic PAYE only - Treat as Employed

Latest payslip,(this applies whether the applicant is paid weekly or monthly).

*Hand written payslips are not acceptable*

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Employers Reference

Providing the applicant is NOT employed by a family business, on occasions where the customer is unable to provide payslips that fit the listed criteria, we are able to request an employer's reference to verify the income

Ltd Company – Director/Shareholder - equal to or greater than 25% Wanting to use basic PAYE only - Treat as Self Employed

Last 3 years SA302’s

original SA302's on headed paper are acceptable. Prints of the online SA302 are NOT acceptable. The year the SA302 relates to and customers name/initial & surname must be shown. SA302's can be obtained by contacting HMRC

Latest 3 years Full Accounts

must be finalised, signed by the accountant and clearly show the net profit (for sole traders), share of net profit (for partnerships) or salary & dividends (for director of Limited company). Profit & Loss statements alone are NOT acceptable

Ltd Company – Director/Shareholder -Irrespective of shareholding Wanting to use basic PAYE (salary) & Dividends - Treat as Self Employed

Last 3 years SA302’s

original SA302's on headed paper are acceptable. Prints of the online SA302 are NOT acceptable. The year the SA302 relates to and customers name/initial & surname must be shown. SA302's can be obtained by contacting HMRC

Latest 3 years Full Accounts

must be finalised, signed by the accountant and clearly show the net profit (for sole traders), share of net profit (for partnerships) or salary & dividends (for director of Limited company). Profit & Loss statements alone are NOT acceptable

Sole Trader OR Partnership

Last 3 years SA302’s

original SA302's on headed paper are acceptable. Prints of the online SA302 are NOT acceptable. The year the SA302 relates to and customers name/initial & surname must be shown. SA302's can be obtained by contacting HMRC

Latest 3 years Full Accounts

must be finalised, signed by the accountant and clearly show the net profit (for sole traders), share of net profit (for partnerships) or salary & dividends (for director of Limited company). Profit & Loss statements alone are NOT acceptable

Partner of LLP receiving profit share as part of their salary package - irrespective of share of equity (Treat as Self Employed)

Latest 3 years SA302's

original SA302's on headed paper are acceptable. Prints of the online SA302 are NOT acceptable. The year the SA302 relates to and customers name/initial & surname must be shown. SA302's can be obtained by contacting HMRC

Latest 3 years Full Accounts

must be finalised, signed by the accountant and clearly show the net profit (for sole traders), share of net profit (for partnerships) or salary & dividends (for director of Limited company). Profit & Loss statements alone are NOT acceptable

Employeeof LLP - not equity shareholding partner (Treat as employed)

Latest payslip (this applies whether the applicant is paid weekly or monthly)

must show applicant & employer name, pay date, basic income, gross & net pay and any additional payments being used in affordability

Employers Reference

On occasions where the customer is unable to provide a payslip that fits the listed criteria, we are able to request an employer's reference to verify the income


Once the mortgage completes 

 Initial interest

For 10/ numbers

The first payment is always collected in the month following completion. Initial interest is calculated from the completion date and added to the mortgage at the end of the month. For example:

If completion occurs on the 15th, interest is calculated from the 15th to the end of the month and then added to the first payment

If completion occurs on the 5th, interest is calculated from the 5th to the end of the month and then added to the first payment


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For independent information on mortgages, visit the website 'Money Advice Service'.

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