A-Z Lending Criteria

The maximum plot size normally accepted is 4 hectares/10 acres and there should be no evidence of agricultural or commercial activity.

Agricultural restrictions limit the occupancy of a property to persons employed in an agriculture related job. Residential applications for the purchase or remortgage of a customer’s main residence where an agricultural restriction is in place may be considered subject to:

• The applicant must be employed in an agricultural related job; however their primary source of income must not be related to the mortgaged property.

• Maximum Loan to Value (LTV) is 50%.

We can consider additional borrowing for a wide range of purposes. Common examples of additional borrowing include:

• Debt Consolidation
• Home Improvements
• Purchase of another property

We will need to know the intended property being purchased and any future mortgage commitments. The underwriter may request: 

• A copy of the sale particulars or memorandum of sale.
• A KFI or mortgage offer, where this will be mortgaged.
• An ARLA letter where a rental property is being purchased.

Buy to Let / Consent to Let

Where a customer requests additional borrowing on a Buy to Let or Consent to Let property, the following circumstances can’t be considered:

• Gambling
• Any form of business purpose (i.e. start up for a new business but please note this does not include buying a buy to let in a limited company name)
• Unsecured Debt Consolidation.  

For more information on a Product Transfer with Additional Borrowing, please visit our dedicated hub here: Additional Borrowing Hub.

Where the customer is in receipt of regular additional income as part of their employment, you should understand the nature of this income to ensure it is considered a variation of acceptable income types (see Income and Packaging Hub), not an expenses related payment and that current levels will continue long term.

Further information on Additional Incomes/Occupations can be seen in the A-Z that include:

·         Long Term Town Allowance

·         NHS Bank

·         Pilot/Cabin crew

·         Shift Allowances

·         Seafarers

·         Tips/Tronc

We consult multiple credit reference agencies to look at credit and bank account conduct.

We will not consider applications from individuals who have declared Insolvent in the past 6 years. Insolvency includes:

• Bankruptcy or Sequestration
• Individual Involuntary Arrangement (IVA) or Protected Trust Deeds
• Debt Relief Orders or Minimal Asset Process

Alternative adverse history may be considered subject to credit scoring, bank account conduct and underwriting.

Where the customer has any background properties that they let out, you need to tell us about this on the application. Please key the full property details including any unencumbered properties in the 'Other existing mortgages/properties' section of the application.

• To use surplus rental income for affordability, please see Rental Income. This is only acceptable on residential applications.
• If the property is self-financing (rental income covers the mortgage payment) but you don’t want to use any rental income to support affordability, this is acceptable. In this situation we will exclude the mortgage commitment from affordability. 
• Should the property run at a loss e.g. the rental income received is less than the mortgage payment creating a shortfall, please key the shortfall amount on the application under Expenditure > Other financial commitments.

Our underwriter reserves the right to ask for supporting documentation to validate what has been keyed on the application. 

Back to back is typically where the vendor has owned the property for less than six months, or remortgages where they've owned the property for less than six months.

Solicitors are required to disclose any transaction in the last six months and, if this happens, cases will be declined after offer unless the circumstances meet one of the following situations in which lending may be considered:

• Customer funded purchase: when the customer has funded the purchase using their own funds or funds from a close family member and are now looking to set up a mortgage. The lending would be restricted to the lower of the original purchase price or valuation.
• Bridging: residential mortgage applications where the customers required a bridging loan due to delays in selling the existing property, subject to normal underwriting. The previous property has now been sold and the applicants are looking for a mortgage on the new property with funds to be used to repay the bridging loan. Buy to let applications are not acceptable in this situation.
• Inherited: a recently inherited property where the beneficiary wishes to release some of the equity for residential or buy to let purposes, or to buy the shares in the property inherited by others (e.g. siblings or joint beneficiaries). We will also consider lending where our customer wishes to purchase the property from a vendor who recently inherited the property. 
• Porting: where a fixed or discounted rate was ported to a new property but is now expiring/has expired and the customer wants to remortgage within the 6 month period to gain a new rate. Proof of the rate roll off has to be obtained for example mortgage offer or rate roll off letter from the previous lender.
• Repossessed property: where the vendor is the mortgage lender in possession i.e. the property has been repossessed within the last six months and is being sold by the mortgage lender or their agent. This does not include repossessed properties being purchased cheaply at auction and then sold on by a third party. 
• Part exchange: where the vendor is a large national house builder selling a property acquired under a part-exchange scheme.

We can accept bank statements providing:

• All of your customers details (full name, address, bank details) are clearly visible and match the details on your application.
• It is the customers full statement and is not filtered (either postal statement or online banking download. The online statements do not have to be certified by the issuing bank)
• You supply the full statements for the months we've requested.
• Screenshots cannot be accepted, please upload the original document.
• The image is clear and good quality.

For acceptable and unacceptable documents, please see 'Certification of Documents'.

We accept a range of benefits up to 100%, please see our Income and Packaging Hub.

Carer's Allowance is paid to people aged 16 or over spending at least 35 hours per week caring for someone with substantial caring needs. We accept 100% of a Carer’s Allowance.

Where a mortgage product includes a cashback feature, it will be paid to the customer’s solicitor with their mortgage funds on the day the customer completes. The customer should agree with their solicitor how they would like to receive the cashback.

For brokers submitting applications via intermediary.natwest.com, the declaration you will make when uploading documents now states:

For income/expenditure documents:  “I am confirming either that the scanned documentation is a true copy of an original document, or where electronic documentation is being supplied, this is an unaltered document obtained by the client directly from the corresponding business or organisation.”

For Customer Identification/Address: The documents I am submitting are true copies of original documents relating to the party/parties on this application.

Acceptable documents

For Income/Expenditure:

•             Photograph of a hardcopy document

•             Scan of a hardcopy document

•             ‘Official’ digital version of a document (e.g. e-payslips, online PDF bank statement etc…)

•             The Photograph must be:

·                     taken from above the document

·                     Free of distortion/effects

·                     Well-lit in natural light (not taken with a flash)

·                     Clear text and numbers

·                     Easy to read throughout

·                     Whole document visible

·                     Document must not be cropped or edited

·                     PDF, PNG or JPG format

•             Each photo must contain one document/page only

Unacceptable documents

•             Screenshots from mobile/tablet/PC/laptop etc

•             Photographs of a screen

•             Manual documents (e.g. Excel spreadsheets instead of bank statements etc…)

•             Taken at an angle

•             Visible distortions or flash effects

•             Very dark

•             Unclear/blurry text and numbers

•             Difficult to read

•             Parts of document missing/cannot be read

•             Cropped or edited pictures

•             Any other file format

•             Multiple documents/pages in each photo

We can accept up to 100% of Child Benefit and Child Tax Credits.

Please note that if an applicant is heavily reliant on these benefits (the ratio of benefits to main income) then please discuss these with our BDA team but be aware that the final decision is subject to underwriting.

The age of an applicant's children may be a factor. We require the awards letter as part of the application packaging. If the benefit will end for one or more of the children in the next 5 years, consideration should be given to if and how the customer can replace this income. If the income will not be replaced, then this element of the benefit should not be used.

If any party to the application receives an income of greater than £60,000 - Child Benefit must not be included.

Please note the customer(s) named on the award statement must match the application.

Click below for more information on:
• Working Tax Credits 
• Universal Credit

We use the actual amount the customer has declared they pay in our affordability calculations for this commitment. Customers with dependants will be asked about the type of childcare they use, how often and how much they spend.

• No evidence is required upon submission, where we identify costs that differ to costs declared on the application, the underwriter may ask further questions to confirm correct figures.
• Childcare costs should be considered over the next 5 years and the highest cost should be used for affordability.
• Where the customer is currently pregnant, on maternity leave or if childcare arrangements are yet to be made. Customers can suggest likely future costs or you can refer to the national average figures here.

When should childcare costs not be included?

There are several situations where childcare cost should not be captured in the affordability calculations. These include but are not limited to:

• Where customers are using free childcare e.g. a relative to look after their child.

• Where the childcare costs are stopping / reducing within the next 6 months.

• Where the customer benefits from free childcare hours.

• Where a customer is proactively using a childcare provider as a developmental experience and the costs are discretionary.

For information on this, please see our Property and Valuations Hub.

Consumer Buy to Let is a type of regulated business introduced by the MCD to provide enhanced protections where Buy to Let customers are not acting for business purposes.

Our approach to identifying a consumer Buy-to-Let is based on how the customer views their Buy to Let activity. Where the customer intends to benefit from house price growth and rental income we will class this as investment purposes and can consider a BTL mortgage, as we will not treat it as a consumer BTL.

We don’t offer consumer BTL mortgages.

Sourcing Tip – If property will be used as an investment property, ensure that sourcing isn’t filtered by Consumer Buy to Let so that NatWest appears on your sourcing.

For more information, please see our Buy to Let hub. 

We support customers who are contractors and have dedicated information on our Contractors hub, including:

• PAYE Contract Workers including Zero hour and Agency workers.
• Construction Industry Scheme (CIS).
• Umbrella Company Contractor.
• High Income / Day Rate Contractors.

Debt consolidation is where a customer wishes to clear existing debts as part of a new business or additional borrowing application.

The maximum LTV that we offer for Debt Consolidation is 80%.

The below table outlines what we do and do not classify as debt consolidation.

Where funds are being raised on a remortgage to NatWest to repay and consolidate existing debt, you do not need to include this debt as a commitment on the affordability calculator. We will disregard these commitments from affordability in this scenario. Please ensure you still include these debts in the ‘Expenditure’ section of the AIP and Full Application and then select the option to confirm that debts will be repaid.

A dependant is any person who relies on the customer financially for things like money, clothes or food, whether living at the property or not. This includes financially dependent partners not named on the mortgage, children under 18, those in higher education, and financially dependent elderly relatives.

Where the customer pays maintenance for a child, they should not be listed as a dependant.

If your customer is expecting a child, e.g. currently pregnant or has approval to adopt, then this extra dependant must be included when assessing affordability.

An Early Repayment Charge will be incurred on any overpayment that exceeds the annual 20% limit. Please refer to the early repayment section of your Mortgage Illustration or offer document for information on early repayment charges that would be incurred if any overpayment exceeds the annual 20% limit.

The year runs from the date the mortgage was taken out (or your customer's current product) and the 20% includes all sub accounts and is specific to each of these that makes up the mortgage.

If customers reduce their ported balance then a partial ERC must be paid for the amount that the borrowing is being reduced by, less any overpayment allowance, if it is tied into a product at the time of redemption.  

For further guidance on Porting click here.

To see the ERC’s on current products, please review our Product Guide. 

Applicants must have been in continuous employment for a minimum period of 6 months. We class it as continuous where there is no break of more than 3 weeks between employments. The client should be in their current position for at least one month and have one month’s payslip showing their new income. If self-employed, two years accounts required.

Where the customer is a graduate and secured employment in a relevant field, the application may be considered without 6 months continuous employment, subject to underwriting.

Please also see Probation. 

Please see 'gifted equity/concessionary purchase', under Proof of deposit.

• Product fee: this is the fee payable for the selected product and can be added to the loan. Adding this fee to the loan doesn’t affect the LTV rate banding and can be added on top of the maximum lend given for affordability.
• Legal fees: these are paid to the solicitor for legal work done on behalf of the customer (i.e. transfer ownership of the property to them) and work undertaken on behalf of the lender (e.g. registering the mortgage deed). 
• Occupier's consent form fee: this applies to other people living in the property age 17 or over (excluding dependants under 26). If the property is in England or Wales these people will need to sign a consent form and receive independent legal advice prior to completion, for which they are likely to be charged a fee. 
• Variable valuation fee: this covers the cost of the valuation. See Valuation Fees.
• CHAPS fee: this is a charge for sending the mortgage funds to the customer's solicitor on completion.
• Early repayment charge: this is payable if customer repays all or part of a mortgage during the deal period.
• Adding fees to the loan: A product fee is the only fee that can be added to the loan. Adding this fee to the loan doesn’t affect the LTV rate banding and can be added on top of the maximum lend given for affordability.
  • Exception: Right to Buy- Legal fees can be added to the loan but only within the maximum LTV limits.
• Future fees: once your customer’s mortgage is set up, they may need to pay one-off fees for other services. These include changing the date of direct debit collection, duplicate statements, adding or removing someone from their title deeds.

For more information, please review:

Mortgage Account Charges

We capture the following commitments in the ‘Expenditure’ section of the application form. You should ensure that the commitments captured here total the same amount of what you have used in the affordability calculator.

Loans:

• Hire Purchase.
• Personal Contract Purchase (PCP).
• Secured Loan.
• Unsecured Loan.
• Student Loan.

Credit/Store Cards

Other financial commitments:

• Dependant costs (child).
• School / education fees.
• Childcare costs.
• Dependant costs (adult).
• Estate rent.
• Service charges.
• Ground rent.
• Maintenance payments.
• Second property costs.
• Help to Buy loan - include 3% of the equity share (divided by 12) as a monthly commitment.
• Other committed expenditure.

Commitments with less than 6 months left to run, can be excluded when checking the affordability calculator. Exclusions to this are: credit cards and car finance agreements (e.g. Hire Purchase, PCP).

Where the customer has stated that they no longer need a car and will look to return it, we will still factor this payment into affordability.

• Our definition of a First-time Buyer (FTB) is a customer who has not owned a property before.
• First-time buyer exclusive products are only available on a capital and interest basis
• If the mortgage application is made by more than one person, one of the applicants must meet this definition in order to qualify for any first-time buyer exclusive mortgage deals
• A customer who has a buy to let property but is now seeking to purchase a residential property does not qualify. The customer is not buying for the first time as they have already bought a property.

For more information, pleasee see our first-time buyer hub.

In all gifted deposit scenarios we will require a Gifted Deposit Letter. 

Please see Proof of deposit.

Our Green mortgages are for residential and buy to let property purchases and remortgages with an energy performance rating of A or B or New Builds under our approved list of Developers. Please visit our dedicated Green Mortgage hub.

Upon submission of an application, we will attempt to electronically verify and validate the identity of a customer. If successful, you will receive a message to confirm that we will not require any further proof of identity. Where we are unable to verify their identity, you will be asked to send us certified copies of their identity documents.

If the applicant is a non-UK national – we will always need a copy of a passport and a valid Visa or share code (as we will need to do the check) at the time of application. We will need to see both pages of the VISA to confirm Name, DOB and Validity.

See our Income and Packaging Hub for more information.

Please see our Income and Packaging Hub.

Probate will allow an estate to be distributed to the relevant beneficiaries by the appointed representatives.

Please submit the application as:

• A purchase application where the property has not yet been transferred into the beneficiary’s name (but will be following completion of the mortgage) meaning Land Registry will not have been updated to show the beneficiary as the legal owner. We can treat the equity that is to be inherited as the clients own deposit in the same way we do for concessionary purchases. Please see 'gifted equity/concessionary purchase', under Proof of deposit.
• A Remortgage application where the property has been transferred to the beneficiary and Land Registry has been updated to show the beneficiary as the legal owner. This is still acceptable under our Back to Back / Day 1 Remortgage criteria.

Where the remaining leasehold term is less than 85 years, the value of the property will continue to reduce until the lease is extended. This may result in the valuation being less than the purchase price or estimated value. This could also result in the property being declined. 

In all instances, assessment will be made based on the valuer's comments. We require a minimum of 30 years to be remaining on the lease at the end of the mortgage term. However, some flexibility is allowed for properties in prime locations in central London, where the minimum lease left at the end of the mortgage should be 10 years. 

First Time buyer/Non-owner occupier:

Maximum lending to age 80 or the customers intended retirement age where this is sooner. We don’t lend into retirement or where the customer is already retired.

Small Landlord/Portfolio Landlord:

Maximum lending to age 80 irrespective of retirement age.

For more information, please consult our Buy to Let Hub.

We are not able to accept residential lending into retirement applications.

Where a customer is already retired and in receipt of retirement income we can consider these applications as long as they meet our Age Requirements.

We are investigating a solution that would allow a customer whose existing term takes them into retirement to port like for like via a broker channel in the future. Currently, where the customer is looking to do this and their existing term goes into retirement, they should contact us directly.

We will not allow customers to take any additional borrowing where the additional borrowing term extends into retirement.

All the above requirements apply to both employed and self-employed applicants.

Please see our Porting Hub for further information.

The above is subject to the product chosen from our product range.

All Buy-to-Lets: 75%, up to £3.5m.

*Where there is any debt consolidation, LTV will be restricted to 80%.

Further lending limits apply to:

• Agricultural restriction
• Freehold Flats/Flying Freehold Properties
• Right to Buy

A Let to Buy is where they are currently letting out or intending to let out their existing residential property, in order to purchase a new property.

Buy to Let Application – Remortgaging the existing residential property

These applications can be considered, for more information on our Buy to Let criteria, please consult our Buy to Let Hub.

Residential Application – Purchasing the new property

Where the predicted rental income on the property to be let covers the expected mortgage payment, this can be disregarded from the affordability calculation.

We require a letter from a local ARLA-registered letting agent or estate agent to show the expected rental income.

If there is a shortfall then this must be disclosed as a monthly commitment.

Where we are doing the let to buy application and the new purchase application, the combined average Loan to Value (LTV) must be 90% or less. This is our standard policy however is subject to underwriters’ discretion.

Child maintenance:

Child maintenance can be accepted at 100%. This can either be court ordered or non-court ordered.

Court Approved Maintenance (spousal):

Can be accepted at 100%. This will be subject to underwriting and we may require sight of the court order.

•             There is an expectation the payments will continue at the current level for at least the next 5 years and we may also need to understand how the customer will replace this income when it ends.

•             We require up to 3 months bank statements to evidence this, please see your tailored packaging requirements upon submission of the Full Mortgage Application.

•             The party paying the maintenance can’t be named on the bank account the maintenance is paid into.

•             We can consider maintenance income paid by someone living abroad subject to the underwriters discretion, upon a Full Mortgage Application being submitted. This must be paid in an acceptable currency. 

See 'Lending limits & Max LTV's'.

The European Mortgage Credit Directive (MCD) came into force on 21st March 2016. It aims to harmonise mortgage markets across the European Economic Area, ensuring that mortgage firms act fairly and professionally and that their staff have an appropriate level of knowledge and competence for advising, manufacturing and servicing mortgages. The key issues that lenders and brokers had to incorporate into their businesses were:

• The Key Facts Illustration (KFI) was replaced by the new European Standard Information Sheet (ESIS), which incorporates a new Annual Percentage Rate of Charge (APRC) and second APRC.
• A new approach to monitoring customers’ foreign exchange exposure, including where part or all of their income is in a currency other than sterling.
• A new classification of consumer buy-to-let mortgages.
• A new 7-day reflection period.
• Greater transparency over declined applications.
• Regulation of second charge lending.

European Standard Information Sheet (ESIS): the MCD replaced the old sale and offer Key Facts Illustration (KFI) documentation with a new European Standard Information Sheet (ESIS) template, called a Mortgage Illustration in the UK. This document includes some additional disclosures for customers to ensure they fully understand their mortgage product and the risks of future interest rate increases. Transitional arrangements are in place to enable lenders to use a KFI 'top-up' approach before moving to the new Mortgage Illustration no later than March 2019. We have implemented the use of the new Mortgage Illustration without the transitional step of using the KFI 'top-up'.

7-day reflection period: the MCD introduced a new 7-day reflection period to ensure borrowers have sufficient time to duly consider the various offers they receive. Therefore, when a mortgage offer is made to a customer, there is a 7-day reflection period where the customer’s offer will remain valid for them to accept. At any point during this period the customer can accept the offer, and likewise reject it, or allow the offer to lapse.

We already give our customers longer than 7 days for them to consider offers they receive, so this will not have any impact on our current processes. If a customer wishes to complete the mortgage at any point during the 7-day reflection period they can waive the period by accepting the offer. We will still retain our right to review our decision to lend should new information be provided that changes a customer's eligibility.

Mortgage application declines: the MCD required greater transparency when a mortgage application is declined by a lender. If a customer has their application declined, they need to be told of this decision in a timely manner. Furthermore, if the decline is as a result of information held about the customer by a credit reference agency, the applicant must be informed of the particular agency used.

We utilise multiple credit reference agencies. Where a customer’s application is being arranged by an intermediary and is declined, it is the responsibility of the intermediary to inform the customer of the credit reference agency used if this is the reason for the decline.

Regulation of second charge mortgages: the MCD required that second charge lending becomes subject to FCA mortgage rules. Lenders’ and intermediaries’ existing mortgage permissions enable them to operate in the second charge lending sector and the FCA contacted them in the first quarter of 2016 to find out if they intend to do so. We do not currently operate in the second charge lending sector and have no intentions to do so.

The UK Government has announced new support for borrowers who are struggling with their mortgage payments. We're committed to helping our customers through this difficult time and we're pleased to be a part of this Mortgage Charter to help ease the pressure for our customers.

Should your customer wish to explore their option or find out more they can visit our Mortgage cost of living support page.

Please see our New Build Hub for all you need to know on:

• New Build definition and lending limits.
• Structural warranties.
• Exposure limits on individual developments.
• Help and incentives from Builders/Developers.
• Offer Extensions.
• And more…

• This is received by medical staff for flexible shift work.
• Where a customer receives ‘bank’ income in addition to their main NHS employment this should be treated as overtime (this may be evidenced on separate / additional payslips to the customer’s main income).
• Where a customer is only in receipt of ‘bank’ income, this should be treated as Zero-Hour contractor income.

Offers are valid for 6 months from first issue.

Standard applications – Up to 1 Month extension:

• These can be extended by up to 1 month- the request should be lodged within 30 days of the initial 6 month offer period expiring.
• Offer Extensions will be subject to confirmation of a successful credit search (no additional footprint will be made).
• One month offer extension form.

New Build applications – Up to 6 Month extension:

• An extension can be requested on two occasions for a maximum period of three months each. The first extension should be requested within 30 days of the initial 6 month offer period expiring and then again 30 days before the first extension expires.
• If both extensions are granted, customers could have a total offer period of up to 12 months.
• Offer Extensions will be subject to confirmation of a successful credit search (no additional footprint will be made) and a free refreshed property valuation.
• New Build Offer Extension Form.

The original product will still be valid or can be updated to one in our current range.

Once you have submitted a full application you will receive confirmation of the packaging requirements for your individual case.

Please see our Income and Packaging Hub for more information.

When a customer is on maternity or paternity leave, it is important to understand the current and future circumstances for mortgage affordability purposes.

In all scenarios:

• We require evidence of the customer's income, prior to going on maternity leave, via the last three month's payslips showing previous pay.
• Ensure to capture a known increase in under 18 financial dependants.
• We require details of future childcare provision and costs, where applicable. You can use the customer declared amount, if known, or national averages.

We reserve the right to request additional information if required.

Returning to work on the same basis

We will use the customer's basic salary earned prior to going on maternity/paternity leave for affordability purposes.

Returning to work on a different basis

We will use the customers future basic salary, based on a pro rata of the previous basic salary, prior to going on maternity/paternity leave, for affordability purposes.

Our Existing Customer Hub has information on how we can support customers who are experiencing payment difficulties. 

Some payslip deductions must be included within our affordability assessment whereas other may be excluded where the applicant confirms the deduction is discretionary.

Please note: this list is not exhaustive.

Procuration fees are paid to networks or mortgage clubs on a Wednesday- 8 to 12 working days after completion.

For any procuration fee queries, please check with your network or mortgage club in the first instance. For further assistance contact the Broker Line on 0345 600 0205.

Click here to view our latest remortgage and purchase products.

To see what Product Transfer and Additional Borrowing rates are available to your customer, you can log in using their details and we’ll show you what deals they can choose from today.

We offer a facility to enable you to assist existing NatWest mortgage customers to switch to a new NatWest mortgage rate when their current deal comes to an end.

Available for both residential and buy to let business for customers who are within their 6 calendar month roll off period, those on standard variable rate (SVR)and those with ‘track and switch’ functionality. 

Please see our Product Transfer Hub for further information.

We do not currently support regulated Buy to Let.

The following methods are acceptable:

• Capital and Interest (C&I).
• Interest Only (IO).
• Mixed repayment method (part and part).