Suitable for:
People who are: sole traders; company directors; trading in a partnership; self-employed contractors with their own limited company; and self-employed professionals (e.g. solicitors, GPs, medical doctors, accountants) in their first year of self-employment within an established partnership or practice.
Flexible underwriting means we’ll assess all types of self-employment and we’ll work with you and your customer's accountant to fully understand the business.
We’ll consider retained profit and net profit performance – not just salary and dividends.
Loan amount and loan to value
For loans up to £300,000 you can borrow up to 95% of the property valuation or purchase price (whichever is lower).
We’ll lend up to 95% LTV if the borrower meets our Professional Criteria
For loans up to £450,000 you can borrow up to 80% of the property valuation or purchase price (whichever is lower).
For loans up to £750,000 you can borrow up to 70% of the property valuation or purchase price (whichever is lower).
For loans up to £1,000,000 you can borrow up to 60% of the property valuation or purchase price (whichever is lower).
Maximum loan size is £1,000,000.
Property
Available for owner occupied residential properties. All mortgages are subject to a suitable property valuation.
For property purchases in Scotland, we can normally use the property valuation contained in the sellers' Home Report provided that it’s no more than 3 months old. Speak to your Business Development Manager for more details.
For mortgages more than 80% loan to value
For sole traders or partners:
- We’ll consider the average share of the last 3 years’ net trading profit.
- Where there’s only a 2-year track record, we may also take into account an estimate or projection for the coming year, as long as:
- Annual turnover is level, or progressively rising.
- Net profit (and share of net profit) is level or progressively rising.
- Income drawn from the business does not exceed the share of net profit in any accounting period.
For directors of a limited company:
- We’ll consider the average salary/dividend for the last 3 years and any retained profit.
- Where the company has only a 2-year track record, we may also take into account an estimate or projection for the coming year, as long as:
- Annual turnover is level, or progressively rising.
- Net profit is level or progressively rising.
- Salary plus gross dividends are level or progressively rising.
For mortgages of 80% or less loan to value
For sole traders, partners and company directors:
- Our underwriting team will assess the sustainable income, with reference to at least one year of financial history (supported by either final accounts, or an accountant’s certificate) and a projection for the coming year.
- The type of business and number of shareholders can influence any mortgage decisions.
Applicants must be at least 18 years old and normally not more than 85 at end of mortgage term. Minimum mortgage term is 5 years and maximum term is 40 years.
All mortgage applications are based on affordability.
- For loans less than 80% of the property valuation or purchase price (whichever is lower) we’ll lend up to:
Single applicant: 4.5 x income
Joint applicants: Main income x 4.5 plus second income x 1 OR Joint income x 4 - For loans over 80% of the property valuation or purchase price (whichever is lower) we’ll lend up to:
Single applicant: 4 x income
Joint applicants: Main income x 4 plus second income x 1 OR Joint income x 3.75
Any existing financial commitments will be taken into consideration when we calculate affordability.
- Capital and Interest
- Interest only - available up to 75% of the property value or purchase price (whichever is lower) with a maximum loan size of £350,000. When applying, we’ll need confirmation that plans are in place to pay off the mortgage at the end of the term and we’ll ask about these plans occasionally throughout the mortgage term. Examples of these plans are normally endowment policies; stocks and shares ISAs; pension lump sums; and second/investment.
Check our current interest rates.
Security
A Standard Security (Scotland) / First Legal Charge (England) will be taken over the property being purchased as security for the mortgage borrowing.
Early Repayment Charges
If overpayments of 10% or more of the loan amount are made in any 12 month rolling period during the initial period, and depending on which mortgage your customer has, the following charges will apply:
- For our 3-year mortgage, the charge will be equivalent to 3% of the outstanding balance amount in year 1 and 2 and 2% in year 3.
- For our 5-year mortgage, the charge will be:
o 5% of the outstanding balance in the 1st year
o 4% of the outstanding balance in the 2nd year
o 3% of the outstanding balance in years 3 & 4
o 2% of the outstanding balance in year 5
After the initial period, the Society will not make an early repayment charge if the mortgage is on Standard Variable Rate and is repaid. However, there will be certain redemption fees that will need to be paid (see our Mortgage Product Rates leaflet for more information).
Insurance
We’ll need to provide evidence that buildings insurance for the property is in place before we can release funds.
Moving house
This mortgage can be transferred to a new property if the application satisfies our normal lending criteria.
Packaging requirements
Check our Packaging Requirements for full details of documents needed for mortgage applications.