Lending criteria and customer eligibility

Find out all about our lending criteria and customer eligibility.

This section contains an overview of our criteria. We aim to cover all relevant information however, if there is anything that you are unable to find or need some more information on then you should contact us on our Helpline.

You should contact us to discuss any applications outside of our standard lending criteria and customer eligibility prior to submitting an application.

Intermediary information logo

Intermediary helpline:
0345 600 5775

Criteria

  • A-C

    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

    Our Affordability Calculator

    Bank of England Base Rate

    Our mortgage rates are not linked to Bank of England Base Rate.

    Bankruptcies

    We generally do not accept applications where any of the applicants are currently bankrupt. Where an applicant is a discharged bankrupt please refer to ourselves for further information.

    Breakdown of Loan

    For the purposes of completing the mortgage application, this could be:

    • House purchase, amount and source of deposit
    • Remortgage, name of lender, balance outstanding, remaining term, type of repayment
    • Moving Home, including details of existing mortgage and agreed sale price if applicable
    • Debt consolidation, detail amount and breakdown of any additional funds required
    • Any element of additional borrowing, including purpose

    Change in Title

    For existing Danske Bank mortgage customers wishing to make a Change in Title, please refer to us.

    Changes to Mortgage Application

    Once the mortgage application has been made, if there are any changes to this application please refer to ourselves for further information. We may need you to create a new mortgage application.

    If the applicant's original mortgage product has been withdrawn or changed, a new product must be selected.

    CCJ's

    Will be taken into account during the credit scoring process and further information relating to the circumstances should be provided.

    Co-Ownership

    Available with Co-Ownership

    Committed Expenditure

    Please detail all committed expenditure on the application form:

    • Hire Purchase/Personal 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
    • Pension (if not deducted at source)
    • Professional Subscriptions

    Consumer Buy to Let

    For Consumer Buy to Let applications, please refer to us.

    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:

    Experian Limited
    Consumer Help Service
    PO BOX 8000
    Nottingham NG80 7WF

    Telephone number: 0844 481 8000

    Customer Verification

    All applications must be submitted with customer verification documents. You can find a list of the documents that we will accept to verify the ID and Address of a mortgage applicant in the Mortgage Intermediary Aide Memoire.

    This document also advises you how to certify our documents.




  • D-F

    Danske Follow-on Rate

    All Fixed Rate mortgages effected on or after 26th June 2018 will automatically move to the Danske Follow-on Rate applicable to the loan at the end of the Fixed Rate period. Danske Follow-on Rate is a variable rate comprised of Danske Bank Reference Rate (UK) currently 0.10%, plus a margin of 3.20%.

    If the Fixed Rate mortgage was effected on or before the 25th June 2018, it will automatically move to our Standard Variable Rate, as outlined in the mortgage offer.

    Decision In Principle (DIP)

    We provide a Decision in Principle (DIP).

    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.

    Debt Consolidation

    We will normally only consider debt consolidation for our existing residential mortgage customers. Please refer to us.

    Direct Debit Details

    Direct Debit mandates will be required for all mortgage applications where a Binding Offer has not been provided as of 6 July 2020.

    Any applications where a Binding Offer has been provided before this date will not be eligible for a Direct Debit mandate. If the customers main account is with another lender, they will need to ensure that funds are in the account with another lender the business day before the mortgage repayment is due to be debited from their servicing account with us.

    Distressed Sales and Leaseback

    We do not accept applications involving a distressed sale and leaseback.

    Early Repayment Charges

    Early Repayment Charges only apply to our Fixed Rate mortgage products. An Early Repayment Charge (ERC) may apply if the customer repays the mortgage in part or in full, or transfers to one of our products during the fixed rate period.

    The ERC is calculated as a percentage of the capital balance outstanding at the date of redemption. Customers may be able to overpay without ERC. Please refer to the customer’s mortgage illustration and offer documentation for full information regarding Overpayments and Early Repayment Charges. Their mortgage illustration or offer will detail any criteria around this.

    For more information on Early Repayment Charges and Mortgage exit fees, please see our Tariff of Mortgage Charges section within the General Offer Conditions document.

    Employment

    We will consider applicants who are employed on Permanent Contracts of employment. We may also consider applicants who are employed on Fixed Term or Agency Contracts. Please refer to Income Documents for detail on what verification documents are required and note that we may require additional documents in some circumstances.

    First Time Buyer (FTB)

    A customer who has never previously owned a property which required finance. Where the application is joint, at least one party must meet this condition.

    Foreign Currency Mortgages

    The bank only provides mortgages in sterling.




  • G-I

    Higher Lending Charge (HLC)

    We do not impose a Higher Lending Charge, regardless of Loan to Value.

    Income Documents

    For all applications, copies of the following documentation is required:

    Employed applicants

    • Payslips - Where an applicant is employed and income is regular and stable we will only require the most recent 1 month’s payslips. Where income varies, the applicant is paid in CASH/CHEQUE, is employed on a Fixed Term Contract, or where income from overtime/commission/bonus, or permanent contracted allowances feature, we will require the most recent 3 months' payslips.
    • Fixed Term Contracts (FTC) - Where an applicant is employed on a rolling FTC basis, we require the previous 3 years’ P60s.
    • Overtime/Commission/Bonus/Permanent Contracted Income - Where applicants rely on this type of income to service repayments we will require the most recent P60 to confirm Gross Income and most recent payslip to confirm Basic Income. If the additional income payments are not supported by the payslips and P60 we may require additional verifications, such as further payslips or a letter from the customers employer.
    • P60 – Customers paid in CASH/CHEQUE must provide their most recent P60.
    • In current Employment less than 12 months - We will require a copy of the contract of employment. In some cases we may also accept a letter on headed paper from employer. In both instances the document must confirm that the applicant is employed in a permanent capacity and confirm their basic gross annual salary and/or contracted hours and rate per hour.
    • Bank Statements - We will require the most recent 3 months’ bank statements for the applicant’s main transactional bank account (if the applicant’s main transactional bank account is not with Danske Bank.)
    • Mortgage Statement - Where the mortgage is being transferred from another lender, a copy of the latest annual mortgage statement (dated within the last 12 months) should be provided.

    Self-employed customers should provide the following financial information:

    • 3 years’ most recent financial accounts
    • Most recent year’s HMRC Tax Calculation (SA302) and Tax Year Overview
    • If their core transactional personal account is not held with Danske Bank they should provide their last 3 month’s personal transactional account statements

    If financial accounts are unavailable alternative sources of income verification may be acceptable, please contact us for guidance.

    DIRECTORS OF LIMITED COMPANIES

    • We will require the most recent 3 months’ payslips and most recent P60
    • If their core transactional personal account is not held with Danske Bank they should provide their last 3 months’ personal transactional account statements
    • If the director is also a shareholder we will require their last Tax Calculation (SA302) and Tax Year Overview
    • If the director is also a shareholder we will require copies of the last 3 years’ financial accounts for the limited company

    Please note that income tax documentation should be no greater than 18 months old, and in some instances additional documentation may be required. For further guidance on income accepted and documents required, please refer to us.

    Income in Foreign Currency

    We do not currently accept applications from Intermediaries where an applicant’s income, utilised for affordability, is not in Sterling.

    Interest

    Interest is calculated daily and charged quarterly in arrears.

    Interest Only Mortgages

    We do not accept applications for interest only mortgages.

    Internal Switchers (Property Valuation)

    Please contact ourselves to get an estimated valuation of the customer's property.

    Investment Property Loans / Buy to Let

    For Investment Property Loans / Buy to Let, please refer to us.




  • J-L

    Leasehold

    If leasehold, the property should have an unexpired term of more than 50 years at application. Where the remaining leasehold is less than 50 years, please contact us before submitting an application.

    Length of Employment

    If applicant is in employment for less than 12 months we will require a copy of their contract of employment to confirm that the applicant is in a permanent role.

    Self employed applicants will be required to provide 3 years history (this refers to the last 3 years financial accounts for the business). Please refer to the 'Self Employed' section for further information.

    Lending Limits / Loan to Value

    Loan to value is based on percentage of purchase price or valuation (whichever is the lower)

    • First Time Buyers all available on sale LTV bands
    • Home Movers & Remortgage all available on sale LTV bands
    • Any element of Debt Restructure up to 80%

    Additional criteria which applies to First Time Buyers:

    • Maximum loan amount of £250,000
    • Minimum 2 bedrooms
    • DSR (debt servicing ratio) should be less than or equal to 40% (this is in respect of all liabilities, Hire Purchase Agreements, Personal Loans, Credit Card repayments, Mortgage payments etc.)



  • M-O

    Minimum / Maximum Age

  • Minimum - 18 years old
  • Maximum - mortgage must be repaid by applicant’s 75th birthday. If the loan term extends into retirement, with retirement age based on the lower of that advised by the applicant, or age 70, verified post retirement income must meet affordability criteria rules.
  • See section, 'Retirement'.

    Minimum Loan

    • Minimum - £30k - our new mortgage customers
    • Minimum - £10k - our existing mortgage customers repackaging

    Mortgage Arrears

    Applications where previous mortgages have been in arrears will not normally be considered, however please refer to ourselves for further information.

    Mortgage Illustration/European Standardised Information Sheet

    The applicant(s) must have received a Mortgage Illustration before the application is submitted. A copy of our 'Home Loan General Offer Conditions' must be attached.

    Download General Offer Conditions and Tariff of Mortgage Charges

    Non UK/EEA Citizens

    Applicant(s) must be a UK or EEA citizen, or have indefinite leave to remain in the UK.

    They must be a permanent UK resident at the time the application is made.

    Applications from Non UK/EEA citizens will not be considered unless both applicants are:

    • A citizen of a contry in the EEA (European Economic Area) or;
    • Where the applicant (in the case of joint applicants, both) has a permanent right of residency to remain in the UK that is not conditional on the requirment to have employment. Where it is attached to a working or highly skilled migrant visa, it will not be accepted. A copy of the visa page of the applicant's passport will be required to evidence this.

    For joint applications where only one applicant is a UK or EEA citizen, and the other is not, the application may be considered but we will only use the income from the UK or EEA citizen.

    Number of Applicants

    There is a maximum number of 4 applicants in a single application.

    Overpayments & Lump Sum Payments

    Fixed Rate Mortgages

    If the customer’s Fixed Rate mortgage illustration is dated before 4th February 2019, they are entitled to make Overpayments but these will incur Early Repayment Charges.

    If the customer’s mortgage illustration is dated 4th February 2019 or later, they are entitled to make Overpayments up to a specified amount without incurring Early Repayment Charges. Find out more.

    Please refer to the customer’s mortgage illustration and offer documentation for full information regarding Overpayments and Early Repayment Charges.




  • P-R

    Payment Holidays

    Payment holidays are generally not permitted.

    Product Transfer

    Our Product Transfer facility is available for customers with a maturing Fixed Rate mortgage and those with a Tracker Home Loan Standard Variable Rate or Danske Follow-on Rate mortgage. For more information on our Product Transfer facility, please refer to the following Latest News article:

    Product Transfer Facility

    Portability

    Porting Conditions

    If a mortgage is portable it will be outlined in the customers current Mortgage Illustration and Mortgage Offer Document.

    To port a mortgage:

    The existing loan can be closed and the new loan opened on the same day, at which point we will waive the Early Repayment Charge on closure of the existing loan.

    In cases where it is not possible to complete both loans on the same day:

    • The existing loan may be closed prior to the new loan being opened.
    • The customer will be charged the Early Repayment Charge in full on closure of the existing loan.
    • The new loan can then be drawn down at any point during the Offer Period.

    Important

    The customer will no longer be eligible for a refund of any Early Repayment Charge taken if:

    • The loan is not completed within the Mortgage Offer Period.
    • During the Offer Period, either we or the customer decide not to proceed with the offer a new mortgage.

    Only the outstanding amount, remaining term, rate and fixed rate end date (if applicable) can be ported. Any additional borrowing required will be treated as a new mortgage.

    Porting Process

    You will be unable to correctly illustrate or submit an application for a Ported Mortgage using Danske Home. If you require any details for completing your own Mortgage Illustration you should contact us.

    In order to progress an application you must:

    • Send us an application form. Your application form should include details of both the ported element of the loan along with any additional borrowing requirements.
    • Submit your application using our Upload Facility along with all supporting documentation.

    Proof of Deposit

    We will require documentary evidence of any deposit, where it is not coming from the simultaneous sale of a borrower's existing property.

    We can accept deposits provided by gift, please refer to the section 'Third Party Interest' for further information.

    We do not normally accept deposits provided by loans, however please refer to ourselves for further information.

    Property Types

    We generally accept applications for a property of standard construction, containing a minimum of two bedrooms. High rise flats/apartments, bespoke construction types, or properties with access or residency anomalies or restrictions will not normally be considered.

    Property Valuation Calculator

    For remortgages (switchers), to give an indication of approximate property value in the absence of local house price knowledge, you may use Property Valuation Tool. However a professional valuation will be required and the value from this will be used for pricing and collateral purposes.

    Property Valuation Calculator

    Rental Property Income

    Rental Property Income will be considered subject to the provision of evidence of income from the applicant. Confirmation will also be required that tax affairs are up to date.

    Retirement

    Maximum term available is 30 years or advised retirement age, whichever is sooner. Retirement age is based on the lower of that advised by the applicant, or age 70. Loans may be extended beyond retirement age provided that verified post retirement income meets affordability criteria rules.

    This concession does not, however, allow the maximum loan term of 30 years to be exceeded, and the mortgage must be repaid by the applicant’s 75th birthday.

    For joint applications, advised retirement (being the lower of the applicant advised age or age 70) applies to:-

    • Main income earner if serviceability is based on this income alone, or
    • Both applicants if serviceability is dependent upon both incomes.

    Retirement Home Plan / Lifetime Mortgage

    We do not offer Retirement Home Plans or Lifetime Mortgages.

    Right to Buy

    We can only accept Northern Ireland Housing Executive (NIHE) applications through this channel.




  • S-U

    Security

    The standard security will be the property subject to purchase / remortgage. Additional Security may be required.

    Self-Build

    Self-build Mortgages are available through our direct channels. Please refer the applicant(s) directly to us.

    We will, however, consider applications for converting the applicant(s) Self Build facility to a mortgage when the home is nearing completion.

    Self Certification

    We do not allow self certification.

    Shared Equity

    We do not currently offer shared equity mortgages.

    Solicitor

    We do not have a solicitor panel. Applicants must appoint their own solicitor, who must be registered with the Law Society.

    Standard Variable Rate

    If the Fixed Rate mortgage was effected on or before the 25th June 2018, it will authomatically move to our Standard Variable Rate.

    Danske Bank Standard Variable Rate is not linked to the Bank of England Base Rate.

    Sub Sales / Buyback

    We do not permit Sub Sales or Buyback.

    Third Party Interest

    Where a third party interest is identified the Bank will need to be satisfied this is captured. Please contact us for further information if required.

    Terms and Conditions

    Applicants must receive a copy of our 'Home Loan General Offer Conditions' with their Mortgage Illustration.

    Download General Offer Conditions and Tariff of Mortgage Charges

    Tracker Home Loan

    Our Tracker Home Loan mortgage tracks Danske Bank Reference Rate (UK) by an agreed margin for the full term of the loan.

    The interest rate will change immediately following a change in Danske Bank Reference Rate (UK).

    Transfer of Equity

    Please refer to ourselves for further information before creating the application.




  • V-Z

    Valuation

    A Professional Valuation is mandatory for all purchase, remortgage (switcher) and Co-Ownership applications. If the customer is an existing Danske Bank mortgage customer switching products, they will not normally require a professional valuation. The bank will appoint a valuer who will undertake the valuation. Please refer to ourselves if a client would prefer / requires the following:

    • Home Buyers Report
    • Full Structural Survey
    • Co-Ownership purchases. (Co-Ownership valuations are not acceptible)

    The valuation fee will always be paid by the applicant(s). If, for any reason, the loan does not drawdown, the applicant(s) will still be required to pay the valuation fee.

    The valuer appointed will contact the customer by phone to arrange payment directly to the valuer, prior to carrying out valuation of the property.