The
maximum amount you can borrow depends
on a combination of how much you earn
and the value of the property.
Your income -
we assess the maximum we are prepared to lend based on the following income multiples as a rough guide:
Annual gross income:
Employed Up to £50,000
Employed Over £50,000
Self employed all incomes
Loan to value
ratio (LTV):
Loans up to 75% of
property value
Loans up to 75% of
property value
Loans up to 75% of
property value
Single income :
3.5 x gross income
5 x gross income
3 x gross income
Joint
incomes :
3.5 x higher gross
income plus 1 x lower
gross income
5 x gross joint income
3 x higher gross
income plus 1 x lower
gross income
Or if greater :
3 x gross joint incomes
N/a
N/a
Gross income means basic gross salary and permanent allowances such as area or car allowance, plus half bonuses, overtime and commission where these can be proved to be regular.
Loan to value means the amount of loan in proportion to the value of the property. The loan to value is always expressed as a percentage. For example a £75,000 loan on a £100,000 mortgage would be 75% LTV.
* If you apply for the inter-generational
mortgage you can have a term of up to 40
years - subject to a review every five years.
AFFORDABILITY
Income multipliers are only a guide and
the Society will also take into account
any regular credit commitments which have
12 or more months to run and in the case
of shared ownership/shared equity - the
rent and service charges. On the basis of
the information provided the Society will
assess your ability to afford the mortgage
and consider what effect future interest
rate rises could have on your finances.
This is to help guard against the mortgage
becoming unmanageable. If the Society has
any concerns over your ability to afford
the mortgage, where possible you will be
informed before the application proceeds
to valuation.
If you are self-employed, the amount you can borrow will normally be based on your audited business accounts for the past three years, and income will be taken to mean net profit before tax and drawings. If you do not have three years audited business accounts you may be able to take advantage of our self-certification scheme.
PROPERTY VALUE
The amount we lend cannot exceed a certain percentage of the value of the property. This is referred to as the maximum loan to value or LTV. The maximum LTV depends on the particular mortgage product chosen (see individual product details).
Please see the table below for general guidance:
Advance range
Up to £150,000
£150,001
- £300,000
£300,001 - £500,000
£500,001 - £1 million
Over £1 million
Loan to value
75% LTV
75% LTV
75% LTV
75% LTV
75% LTV
HIGHER LENDING CHARGE*
If you borrow more than 75% loan to value, a Higher Lending Charge may be payable. This covers the cost of an insurance policy we will take out to protect us from the risks of lending a high percentage of the value of the property. If your property is taken into possession by us in the future and is sold for less than the amount you owe us, the insurance policy allows us to recover the shortfall from the insurer.
You will still have to pay all the sums due under the mortgage, including arrears, interest and our legal fees, and so the insurance policy does not protect you. The insurer will be able to reclaim from you any money it pays us under the insurance policy.
The cost of the insurance policy is paid by the Society for loans between 75.01% and 90.0% of the property value. For loans between 90.01% and 95.0% of the property value the cost must be paid by you to the Society’s approved insurer.
* We do not currently offer loans higher than 75% LTV.
