Residential policy
We offer additional borrowing to our existing mortgage customers who wish to release additional equity without remortgaging.
Standalone additional borrowing, opening a new additional mortgage account
Your customer can simply apply for an additional mortgage account, selecting a product from the on-sale existing customer product range. This new borrowing will have its own account number, separate direct debit collection for monthly payments as will receipt individual account communications such as annual statements.
As this borrowing is against a separate account, the borrowing can be taken across a different term.
Increase borrowing on the existing account as part of a product transfer
If your customer is within 4 months of rate expiry or on a managed variable (e.g. SVR) the additional funds can be requested as part of a product transfer application. A product transfer application with additional funds can still be made outside of the 4 month product transfer window but an ERC may be applicable.
Total borrowing will be on the same product deal and can be selected from the existing customers product transfer range. There is no minimum value of the additional borrowing requested.
It is possible to vary the term and repayment type of the existing loan agreement as part of the application, subject to lending criteria.
Our additional borrowing has the following key features:
- New business maximum LTVs apply to additional borrowing transactions
- Existing mortgage must be up to date and the application must meet current lending criteria
- Affordability will be based on total mortgage borrowing
- Maximum term is 40 years
- Mortgage term must exceed the end date of the selected product
Income multiples
- The maximum income multiple is 5.5x if the total income is £75,000+ and no applicant is self-employed. Available to 85% LTV
- The maximum income multiple is 5x if the total income is £50,000 - £74,999. Available to 85% LTV
- The maximum income multiple is 4.49x if the total income is under £50,000 or if the LTV is over 85%
Allowable purposes
- We allow additional borrowing applications for most reasons other than business purposes
- If funds are being used for tax bills or school fees please check with us before applying
Maximum LTV
- The maximum LTV for additional borrowing is 90%
- This includes for the deposit on a new property, home improvements, paying off a Help to Buy Equity Loan in full, fully staircasing shared ownership and any other allowable purpose other than debt consolidation
- The maximum LTV where additional borrowing includes any debt consolidation is 80%
Home Improvements
- If additional borrowing for home improvements is more than £50,000 or 20% of the property’s value, we need builder/contractor estimates, plus planning consent if it’s needed
Debt consolidation
- Maximum LTV 80% for debt consolidation
- Maximum LTV 90% if the debt being consolidated was used for home improvements or repair to the property being mortgaged
- Debt consolidation is not usually allowed on interest only. The amount being consolidated must be on capital and interest. Debt consolidation is only allowed on interest only if the debt being consolidated was used for home improvements or repair to the property being mortgaged
- During the application please do not include the monthly payments for any debts being repaid as expenditure