Affordability

We assess all applications on the applicant(s) ability and willingness to meet obligations. We will not grant credit facilities on the basis of security. The term of any facility must be in line with the purpose for which it is granted.

When analysing the applicant's creditworthiness, you must consider their:

• present ability to repay the loan
• future ability to repay the loan
• willingness to repay the loan

In order to ensure that the customer can afford to repay their mortgage in the event that interest rates increase we also undertake a stress test to show the effect of this of their mortgage repayment. Before you submit an application, you must use our affordability calculator to check if the applicant meets the following criteria.

• Net Disposable Income (including stress test)
• LTV
• Debt Service Ratio

Committed Expenditure

Please detail all committed expenditure on the application form:

• Hire Purchase / Personal Loans / Student Loans
• Childcare / Education Fees
• Child Maintenance / Alimony payments
• Credit Card (s) / Store Cards / Mail Order / Overdrafts - a minimum payment of 3% of the current balance of each facility will be included in the calculation of affordability.
• Life Insurance / Private Health Insurance
• Pension Contributions
• Professional Subscriptions

Credit Scoring

All applications will be credit scored. We use information provided by Experian as part of our credit assessment.

Applicants can obtain their information by contacting Experian directly at:

Telephone number: 0844 481 8000

Debt Servicing Ratio (DSR)

A Debt Servicing Ratio (DSR) is a measurement of what percentage of a customer’s monthly income is required to service committed liabilities.

Loan to Income

• 5x If Application Income is >=£75k and LTV <= 90%
• 4.5x if Application Income <£75k and LTV <= 90%
• 4.25x if LTV > 90%
• 4.49x Application Income for Help to Buy Applications

Retirement

Loans may be extended beyond retirement age provided that verified post retirement income meets affordability criteria rules. If mortgage term is more than 11 years and will not take applicant more than 5 years beyond retirement evidence that applicant is currently making pension contributions will be required. If mortgage term is less than 11 years and will take applicant more than 5 years from retirement pension projections will be required and will be used for affordability.

The maximum loan term of 40 years can not be exceeded, and the mortgage must be repaid by the applicant’s 75th birthday.