Residential mortgages

Where the product allows for legal fee assistance, we use either Optima Legal or O’Neill Patient Solicitor (ONP).

Loan to value limits on residential purchases are: 

New purchase

The 95% should include any product fees. 

New build

The 95% should include any product fees.

Re-mortgage 

The 90% should include any product fees.

Debt consolidation on a capital repayment basis

The minimum repayment term is 5 years. We will consider a maximum term of 40 years.

If any element of the mortgage loan is interest only a maximum term of 25 years will be considered. 

We accept residential applications from applicants who are aged 18 or over. For buy to let or holiday let applications the minimum lending age is 21. 

All residential mortgages should be repaid on or before the eldest applicant’s 85th birthday.

If any element of the mortgage loan is interest only, the mortgage will need to be repaid on or before the eldest applicant’s 70th birthday. 

For buy to let or holiday let applications we consider a mortgage term until the eldest applicant’s 85th birthday.

Where the property is leasehold, the unexpired term of the lease at the start of the mortgage loan must be a minimum of 85 years.

Please search for 'lending into retirement' for more information. 

The product fee can be added to the loan as long as the total borrowing meets the affordability calculation and does not exceed the maximum LTV cap for the product.

All product fees are non-refundable and non-transferable.

We provide mortgages on freehold and leasehold properties in England and Wales.

£5,000 is the minimum loan amount for a new residential mortgage advance.

£25,000 is the minimum loan amount for a new build, buy to let or holiday let.

If our standard variable rate increases or decreases, the discounted rate paid will also increase or decrease.

The standard variable rate will apply at the end of the fixed or discount period.

Overpayments are available on all non-flexible residential, buy to let and holiday let mortgages. 

The overpayment allowance is 10% of the outstanding balance as at January 1st every calendar year. 

Overpayments can be made regularly or as occasional lump sums.

Overpayments received above the annual allowance may incur an early repayment charge.

We’ll arrange a desk valuation on any residential purchase or re-mortgage application with a LTV cap of 75%.

The property value is limited to £500,000 with a maximum loan size of £400,000.

It must be a house that is not listed, has no more than two storeys and has a standard construction.

For all other application types, a physical valuation is required.

All applicants must be a UK resident at the time of application and have at least 2 years UK residential address history.*

We’ll lend to: 

• A European Economic Area (EEA) national who is resident in the UK and at the time of application has permanent legal right of residence in the UK, pre-settled status or settled status; or
• A Non-EEA national resident in the UK who has obtained indefinite leave to remain or has more than 12 months on their visa at the time of application.

And, for joint applications only one applicant needs to meet our visa criteria.

We’ll allow:

• Up to 95% LTV lending for EEA and non-EEA applicants*

*Subject to successfully passing a credit check.

For any strong cases outside of this criteria which you feel have a good rationale for lending please speak to your local BDM.

The deposit and costs for the purchase should be provided out of the applicant’s own resources. However, gifts from immediate family are acceptable. An immediate family member is defined as a spouse, mother, father, brother, sister, child, grandparent, grandchild or legal guardian.

The maximum number of applicants is 4.

We will consider all applicants incomes.

All 4 applicants must live at the property. 

We’ll accept interest only residential mortgage applications on this basis:

• The maximum loan to value is 50%. A mix of interest only and repayment is allowed but the total borrowing must not exceed 50% LTV;
• The maximum term is 25 years; 
• Mortgages will need to be repaid on or before the eldest applicant’s 70th birthday; and 
• The minimum equity in the property is £150,000. 

Evidence of a repayment strategy that meets our criteria and documentary evidence is required for interest only or part interest only mortgages.

Please see our Interest only residential mortgage applications: Repayment strategy, evidence and assessment guide.

All income and affordability for interest only mortgages is assessed by our standard affordability calculator model on a repayment basis. 

Capital raising for debt consolidation is not acceptable on an interest only basis.

If the new loan is shown to be affordable, we will consider loans where part of the total advance is used to repay other secured or unsecured debts.

This includes agreements with family or friends. 

Applications will be considered on the following basis

- Maximum Loan to Value (LTV) 75%;
- Capital repayment only; 
- A special condition is added to the mortgage offer which requires the applicant to repay the debts in the application; and 
- All current debts (including those being repaid) are included in the affordability calculation.

When we can’t locate applicants on the electoral register, we’ll ask for proof of the applicant/s address for the last 3 years.

This must be a UK address.

We will accept joint residential new mortgage applications made between an applicant and a sponsor.

A sponsor can be a parent, grandparent, child, grandchild, sibling, spouse or legal guardian using all income for affordability.

The sponsor does not need to be on the deeds. 

A sponsor cannot live in the property.

We only accept applications for purchases only. We do not accept remortgage applications.

Contact your local BDM for your JBSP applications or visit Family boosts for more information. 

We accept applications from our armed forces. 

They may have access to schemes to help them purchase their own home e.g. Forces Help to Buy. As part of their application, applicants will need to provide a confirmation document from their employer.

Some schemes have a loan repayment element and some applicants must maintain a residence on or near their work base. Any monthly outgoings related to this must be included as expenditure for the mortgage calculation.

Where the existing residential property is to be let rather than sold, we’ll need a copy of the Assured Shorthold Tenancy Agreement (England) / Written Statement of Standard Occupation (Wales), or a letter from the letting agency confirming the intention to let. 

For let to buy, we will require rental coverage of 145% of the monthly mortgage payment @ 5.50%*

* This is for 5-year fixed products. For 2-year fixed products we will require 7.65% as rental coverage.

If another lender is involved, a consent to let letter will also be required.

We will consider Help to Buy Wales with as little as a 5% deposit.

Right to Buy council schemes. 
The mortgage loan must have the same names as those being offered the discount on the legal paperwork. We can lend the total discounted purchase price up to 95% of the property value. Where a clause exists that, for example, restricts the re-sale of the property the maximum loan will be 95% of the lower valuation and the tenant’s discounted purchase price. We don’t lend additional funds for home improvements on a right to buy application. We will consider house only, no flats.

We will include rent as a cost to the client when assessing maximum affordability for shared equity purchases.

Residential applications

• We accept residential applications from applicants who are aged 18 or over. 
• All residential mortgages should be repaid before the eldest applicant’s 76th birthday. Underwriters will consider repayment before the eldest applicant’s 85th birthday.
• If any element of the mortgage loan is interest only, the mortgage will need to be repaid before the eldest applicant’s 70th birthday. 
• For joint borrowers, where the term extends beyond the oldest borrower’s 76th birthday, the underwriter must be satisfied that the loan is still affordable following the death of either borrower. 
   

Buy to let mortgage applications including holiday lets

• Applicants should be 21 years old or older. 
• All buy to let / holiday let mortgages should be repaid before the eldest applicant’s 85th birthday.
   

Retired applicants 

If lending is past the age of 70 or the applicant's intended retirement age (whichever comes first), the following applies:

• If retirement is more than 10 years away, and the term does not extend beyond age 75 then we will use current income for affordability purposes, as long as the customer can prove they are paying into a private pension (payslip, bank statement or pension statement accepted). 
• In all other circumstances affordability is reliant on a projected pension income. 

For joint borrowers, where the term extends beyond the oldest borrower’s 76th birthday, the underwriter must be satisfied that the loan is still affordable following the death of either borrower. 

For more, search for lending into retirement.

We lend up to 95% loan to value (LTV) for first time buyers, 90% LTV for home movers and 90% LTV on re-mortgage of residential houses, flats, maisonettes and apartments.

We will consider loans for the purchase or re-mortgage of a residential second home i.e. for the borrower’s own use to a maximum of 75% LTV. 

Leasehold properties

• All leasehold properties must have at least 85 years remaining on the lease at the time of application. 

Flats, studios, maisonettes and apartments

• Flats, studios, maisonettes and apartments will be considered as long as the block is not more than 10 storeys.
• We will only lend between 6-10 storeys if the block is a ‘good quality’ residential development for private occupation and built by an established and recognised developer.
• Flats or maisonettes must be leasehold. 
• We are able to lend on ex local authority or housing association flats on developments where demand is high and accommodation is considered desirable. 

New builds

• On buy-to-let new build houses, flats, apartments, studios and maisonettes we lend up to a maximum of 75% LTV.
• On residential new build we lend up to 95% loan to value (LTV) for new build houses. For new build flats, we lend up to 90% loan to value (LTV).

We will not lend on  

• Any property that has a restricted occupancy clause i.e. 157 (relating to the sale of properties in national parks) or 106 (relating to property affordability).

Where redemption of the loan is 90 calendar days or less from the expiration of any product special rate restriction, the early repayment charge (ERCs) will be waived and the customer can select a new product from Principality’s mortgage acquisition range available at the time.

This is subject to a simultaneous redemption and completion of a new mortgage loan with Principality. 

We will not waive the ERC in these circumstances:

• Where the client already owns the property to which they wish to transfer this mortgage; 
• Where the amount the client wishes to transfer to their new property is less than the balance outstanding at the time of transfer; 
• Where the client chooses not to transfer their loan on its existing terms; 
• The client may not borrow additional sums on the terms governing the amount they wish to transfer. They may only borrow additional amounts by choosing another non-flexible product from our range current at the time; or 
• The client or their new property does not meet our lending criteria current at the time of the transfer.

This list is not exhaustive.

All intermediary porting enquiries should be submitted to your local BDM or via our support desk.