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%.

For Remortgages: The section ‘Additional Borrowing Purpose’ on the Full Mortgage Application is there for you to specifically capture a breakdown of the use of funds for the additional borrowing amount you are requesting.

Where a customer requests additional borrowing on a buy to let property, applications cannot be considered in the following circumstances: 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 Addition Borrowing, please visit our dedicated hub here:

Additional Borrowing Hub

For specific guidance on additional borrowing for Buy to Let cases, please refer to the Buy to Let section of our A to Z. 

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 & Packaging Guide), not an expenses related payment and that current levels will continue long term.

Where the description of income elements are unclear on the pay slips, a memo may be required to provide additional information to the underwriter.

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 been subject to a bankruptcy order or an Individual Voluntary Arrangement in the last six years.

We can consider applications where one or more applicant(s) has a history of unsecured loan arrears. Subject to credit checks and bank account conduct carried out by an underwriter

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/discounted rate was ported to a new property but has now 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 e.g. mortgage offer/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 & Packaging Guide.

For guaranteed bonuses we will consider an average of the last two years' payments (cash element only) and use 100% of it in our affordability calculation. Please note that if there has been a sharp decline in the latest year's bonus the underwriter may use 100% of the most recent year's bonus.

For discretionary bonuses we will consider an average of the last two years' payments (cash element only) and use 50% of it in our affordability calculation, of which up to 100% can be used. Please note that if there has been a sharp decline in the latest year's bonus the underwriter may use 50% of the most recent year's bonus. We will not consider deferred bonuses.

For information on monthly, quarterly, bi-annual and yearly bonuses, please refer to our Packaging Requirements.

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, GIF, 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 with 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 £50,000 - Child Benefit must not be included.

Please note the applicant(s) must be entitled to the benefit- e.g. the names on the award letter must match the applicants.

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

See 'Property Types'

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 these customers is based on how they view their buy-to-let activity. We anticipate consumer buy-to-let will only apply to customers remortgaging a buy-to-let property where their objective is not to benefit from house price growth or rental income.

We include this question on our application: Will the property be let out for investment purposes?

By ‘investment’, we mean that you are looking to benefit from rental income or future house price growth.

If the answer to this question is ‘No’, the following message is displayed: Your selection has indicated consumer buy-to-let status. At present we do not offer this type of lending. In this case, the application will not progress.

We do not offer consumer buy-to-let mortgages.

Consumer buy-to-let will not apply to purchase transactions, customers with existing buy-to-let properties or any properties with current or future family occupancy. We will continue to apply a consent-to-let for existing NatWest mortgage customers looking to let out a property on a residential mortgage, as long as no rent is being paid by a family member as this would be a regulated BTL.

We include a disclosure on the new buy-to-let sales and offer Mortgage Illustrations to make customers aware that their loan is unregulated. We expect customer demand for this type of mortgage to be low and will monitor the emerging market to ensure we are aligned to market forces.

·         For PAYE contract workers (agency, fixed term contractors, umbrella contractors) we require one year's evidence (for example, two six-month contracts or four three-month contracts) and a contract in place for minimum of a further three months.

·         For zero hours contractors/piece workers there must be a history of employment over the past year and confirmation that a current contract is in place. Income can be verified using the last three months payslips and latest P60 and must demonstrate consistent levels of income.

·         CIS contractors : Whilst technically these applicants are self-employed for tax purposes, for our policy process please select EMPLOYED on our Affordability Calculator, AIP and Application Form. We will use the Gross income figure (minus expenses) shown over the last 12 months from the contract vouchers/statements (applicants also require a current contract and may be asked to confirm there is ongoing work available)

High income contractors

For contractors earning over £75,000 with a day rate, we’ll calculate their income as their average weekly contract income multiplied by 46, provided they can confirm evidence of:

• their latest 3 months’ consecutive personal bank statements for their main account (not required if their main account is with NatWest or RBS).   
• where significant business expenses are identified on the application, 3 months’ consecutive bank statements (personal or business) detailing these.
• a copy of contract(s) to encompass a 12-month period, with a minimum of 6 months’ contract(s) already completed immediately preceding the date of application.
  
• they have taken no more than a six week break between contracts in the 12-month period.
  
• the tax position is paid and up to date.

Where a day rate contractor has switched/is switching to either a Fixed Short Term contract (as employee on PAYE) or to be paid via an Umbrella Company, then we will still seek to assist on such cases provided that our existing high income day rate contractor criteria is met.

For Fixed Short Term Contracts (as employee on PAYE), please include the most recent 4 weekly pay slips and a copy of the contract.  If the contract is yet to start please provide a copy of the contract.  If the applicant does not yet have 4 weekly pay slips then a copy of the contract along with any pay slips received so far should be provided.

For Umbrella Company Contracts, please include the most recent 4 weekly pay slips and a copy of the contract.  If the contract is yet to start then a copy of the contract will be required and we also need to know the amount to be levied by the Umbrella Company for use of their services – this figure will need to be deducted from the customer’s income.  If this is not clear, we may not be able to assess the application until we see sight of the first pay slip.

When a contractor has reverted to Fixed Short Term contracts (as employee on PAYE) or Umbrella Company contracts, we still wish the cases to be submitted as ‘self-employed’.  This is our risk appetite, given the complex nature of these arrangements and the contractors most recent contracting history.

For any cases that do not fit under the above criteria then our standard PAYE contract worker policy will be applicable.

For all self employed contractors, please visit our Self Employed Hub

Please refer to our Income and Packaging Guide for Income proof

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

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

*We still allow all these types of borrowing, in line with our current lending policy. All non-debt consolidation is subject to the criteria of the product being applied for.

Debt Consolidation - LTV Limit

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

This includes 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 (a / 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.

Applicants must have been living in the UK for a minimum of six months and have had six months' continuous employment in the UK. We class it as continuous where there is no break of more than 3 weeks between employments. The client would need to 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.

We rely upon the professional opinion of our valuers to confirm if a property shows the presence of potentially combustible cladding or if there are other fire safety concerns. Should they feel this is the case, they may request an EWS1 form, if there is not one already available for the building., or confirmation of remediation is not available through the government remediation portal (Please see EWS1 Guidance for information of the requirements).

Where an EWS1 form is requested and not available, but alternative evidence of remediation is available (e.g. letter of comfort from developer or FRAEW etc) this can be considered on a case by case basis.

Where no signs of cladding are present and there are no other concerns, the valuation will proceed without the need of an EWS1 form.

What is Accepted?

Properties that are A1, A2 or B1 rated are acceptable as standard.

Properties in England that are A3 or B2 rated, can be considered where they are eligible under the Government Remediation Scheme and a Leaseholder Deed of Certificate can be provided (see further information below).

Properties in England that are A3 or B2 rated can be considered where they are eligible under the Developer Remediation Scheme (see further information below).

Please note that properties rated A3 or B2 may have an impact on the original valuation figure and cannot be appealed.

All valuations are still subject to valuers’ comments.

What is not currently Accepted?

A3 or B2 rated properties outside of England (i.e. Scotland, Wales).

Please note that whilst these types of properties are not currently accepted, this policy is under continuous review

A3 or B2 rated Eligible Buildings - Leaseholder Deed of Certificate

This process will support properties rated A3 or B2 for England only, being remediated through the Government Remediation Scheme and the building must be 11 meters or higher.

Leaseholders in eligible buildings will need to complete and submit a Leaseholder Deeds of Certificate to the building freeholder.

For purchases the Deed of Certificate would need to be obtained from the Vendor.

We will lend based on a new after repairs figure as confirmed by the valuer on an amended valuation report, as it stands today, before the remediation work will be completed.

For further information on Leaseholder Deed of Certificates, please utilise this link.

See 'Gifted Deposit' section.

• Product fee: this is the fee payable for the selected product and can be added to the loan. 
• Legal fees: these are paid to the solicitor for legal work done on behalf of the customer (i.e. transfer owenership 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. 
• CHAPS fee: this is a charge for sending the mortgage funds to the customer's solicitor on completion (£30).
• Early repayment charge: this is payable if customer repays all or part of a mortgage during the deal period.
• Adding fees to the loan: product fees are the only fees that can be added to the advance.
• Future fees: once your client'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 the below document:

Mortgage Account Charges

We capture the following commitments in the ‘Financial Commitments’ 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. (see also ‘Loans / Credit Cards’)

·         Maintenance / Child Support

·         Rent

·         School Fees

·         Childcare costs

·         Adult care costs

·         Ground rent

·         Service Charge

·         Estate Charge

·         Help to buy loan

·         Other committed expenditure

When using ‘Other Committed Expenditure’ please ensure you provide specific detail of the commitment captured.

‘Adult Care costs’ relate to an ongoing cost incurred to care for a dependent adult. For example, long term care for elderly dependants.

For ‘Help to Buy Loan’ please include 3% of the equity share (divided by 12) as a monthly commitment.  See also ‘Shared Equity’ section for further detail.

For specific guidance relating to Childcare costs refer to ‘Childcare costs’ section.

For specific guidance relating to contractors ‘Significant Business Expenses’ refer to the ‘Contractors’ section.

• Our definition of a First Time Buyer (FTB) is a customer who has not owned a property before.
• FTB 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 FTB 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.

We reserve the right to ask for proof of deposit on all mortgage applications. We do not ask you to submit evidence of this up-front, however the underwriter may wish to see evidence where they have any concerns or doubts. 

Gifted deposit: family gift

We accept deposits (and gifts) from parents and guardians and treat them as if they were the applicant’s own deposit. This applies even where the money is advanced against a formal loan agreement or a second charge is put in place to secure the parents’ rights. Any monthly cost relating to a formal loan agreement must be included in the affordability calculation.

Gifted deposit: Third parties (not sellers / vendors

Are an acceptable source of customer deposit, but only where there is no repayment required.

Gifted Deposits – Foreign Nationals

Foreign National customers who do not have permanent right to reside, EU settlement status, or Irish citizenship are required to pay their deposit from their own resources, this means they cannot use a gifted deposit, and in line with current policy, the customer’s visa must have at least 6 months remaining. Builders Incentives Policy for New Build properties remains unchanged. The remaining deposit sources must come from the customer’s own resources

Gifted deposit: Vendor

Vendor gifted deposits are only acceptable where no repayment is required. They must be treated as an incentive and be deducted from the gross purchase price to establish the net purchase price of the property. If, for example, the vendor is offering to pay Stamp Duty/legal fees/cashback on the property being purchased this amount must be treated as an incentive and be deducted from the gross purchase price to obtain the net purchase price. We will base our maximum lend on the net purchase price or valuation whichever is the lower, with the applicant putting their own deposit in.

Gifted deposit: Gifted Equity/Concessionary

The purchase of a property from a family member/family business where the purchase price is less than the value and the vendor does not receive any monies for the difference between the purchase price and the valuation. This situation is only permitted where there is a family connection and subject to the Solicitors providing a clear report on title or appropriate indemnity insurance. Please see discounted purchase/concessionary for more information

Gifted deposit: Letter

Gifted deposit letter- This will be required in all gifted deposit circumstances. There is a template letter in the forms and guides section of the website. Gifted Deposit Letter

Builder's incentive  (see 'Builder's incentives’)

Unsecured personal loans are not acceptable as a source of deposit. The only exception is armed forces personnel who are eligible for a Forces Help to Buy (FHTB) loan.

Green mortgages are available to all intermediaries for all residential and Buy to Let properties with an energy performance rating of A or B and specific new build developer properties. Available for Purchase, Porting & Remortgage applications.

Please note the following information:

• Property must be in the UK.
• There must be either a valid Energy Performance Certificate (EPC) listed on the registers detailed below with a rating of A or B to be eligible or a property from our list of agreed new build developers
• No other EPC data registers or documentation will be accepted, for example a Predicted Energy Assessment (PEA).
• Properties where there is currently only a proposed or anticipated EPC Rating of A or B are not eligible

Acceptable EPC registers:

• England, Wales & Northern Ireland Register: https://find-energy-certificate.digital.communities.gov.uk/
• Scotland Register: https://www.scottishepcregister.org.uk/

Approved New Build Developers:

• Barratt Homes
• Berkeley Group
• Crest Nicholson
• L&Q
• Keepmoat Homes
• Galliard Homes
• Bellway
• CALA Homes
• Miller homes
• Persimmon homes
• Story homes
• Taylor Wimpey 

This also includes any subsidiaries of these companies.

• If you are submitting an application from a firm that is not on the above list, it is the brokers responsibility to ensure the appropriately rated A or B certificate is in place prior to the application submission. Please consult the above EPC registers prior to submitting an application

• EPC must be valid within 10 years since production
• No additional documentation to our standard application packaging requirements is required to be submitted
• Available to first time buyers and existing homeowners
• Products available up to 85% Loan To Value
• Not applicable for Shared Equity or Help to Buy applications
• All standard NatWest lending rules and policies apply

For further information, please visit our dedicated Green Mortgage hub: Green Mortgages

Important information:

• For all new cases please check affordability through our calculators before running an agreement in principle or full mortgage applications
• Once you complete an AIP or full mortgage application we will confirm the basic packaging for your case, however please note that this will only show requirements on basic income, if there is any form of additional income please refer to our income and packaging guide for additional documentation

Affordability calculators

As a reminder it is your responsibility to let us know if there is a change in the customer’s circumstances at any point during the mortgage process.

For assistance with packaging, please use our Income and Packaging Guide.

For guidance with Self Employed Applications, please visit our Self Employed Hub.

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

In addition to standard mortgage criteria the following also applies for Interest only mortgages: 

Minimum income of £75,000 for sole applicants.

For joint applications at least one applicant can earn £75,000, or the joint applicants can earn a combined income of £100,000.

Qualifying Income Examples

App Type             Income                 Outcome

Sole                       £75K                        Meets minimum income - £75k sole income criteria

Joint                      £50K + £60K        Meets minimum income - £100k combined income criteria

Joint                      £75K + £20K        Meets minimum income - £75k sole income criteria

Joint                      £50K + £40K        Fails minimum income - Neither £75k sole or £100k joint income

• Both new and existing customers may apply.
• LTV of up to 75% (if repayment strategy is Sale of Property interest only amount cannot exceed 50% LTV.  A further 25% LTV can be borrowed on a C&I repayment basis).
• Residential - Maximum term of 35 years (30 years if a loan is more than £500,000)
• Buy to let - Maximum term of 35 years if the loan is more than £500,000
• Age range of 18-70.
• Minimum interest only portion of loan is £25,000.
• Available for purchase (including first time buyer), re-mortgage, additional borrowing and porting.
• Debt consolidation can be done on a repayment basis, please speak to your BDM for more information

Where the sale of main residential property is the Repayment Strategy (RS) the following applies:

• Mandatory Packaging requirement – We will always require the Interest Only form to be completed by the customer to confirm their intention is to sell the property and use the remaining equity to downsize.
• Where the entire mortgage is on IO the property must have a minimum equity of £200,000
• Where there is an element of IO and Capital & Interest (C&I) the underwriter must be satisfied there is a minimum of £200,000 equity at end of term when C&I element has been repaid. 
• The main residential property cannot be used as the RS for a second home that the applicant does not reside in.

• Customers who do not have the right to reside for the duration of the mortgage. (For joint applications when one party has the right to reside for the duration of the mortgage and the other does not, the application should be treated as if both applicants have the right to reside the duration of the mortgage).

For more information, please consult our Interest Only Guide.

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.

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.

Please contact our BDA’s..

We are not able 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: www.natwest.com/mortgages.html

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

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

If the rent received on the existing property covers the mortgage payment we will not include this in our affordability assessment on the new property.   

• Applicants need a letter from a local ARLA-registered letting agent or estate agent to show the expected rental income. If it covers the mortgage cost then this payment can generally be disregarded from the affordability calculation. If there is a shortfall in rent then this must be disclosed as a monthly commitment on the affordability calculator.

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

We do not currently support regulated buy-to-let.

We can accept income from court ordered maintenance, child maintenance, and income from family-based or non-court ordered maintenance and child maintenance provided that the payments have been in place for at least three months and are expected to continue at the current level for the foreseeable future, taking into account the age of children.

We require evidence of an applicant's income via their most recent three months' bank statements and their last three months' payslips, prior to their maternity leave. We will use the applicant's basic salary they earned prior to going on maternity leave for affordability purposes. We reserve the right to request additional information if required. We will ask the applicant to confirm that they intend to return to work after their maternity leave but will not seek the employer to confirm.

Maximum LTV: residential

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.

A new build is defined as any property built, first occupied in its current state or significantly modernised, refurbished or altered within the last two years.

The maximum loan-to-value on a residential new build house is 85% (75% for buy-to-let). For a residential new build flat, the maximum is 75% (also 75% for new build buy-to-let flats). The amount will be calculated on the net purchase price or the valuation, whichever is the lower.  Also see 'Builder's Incentives' and 'Offer of Loan - validity'

For New Build Lending Limits and Max LTVs, please utilise our New Build Hub:

New Build Hub

Estate Charges

Estate Charges relating to the maintenance of communal areas on a new build site should be provided at the time of application

Leasehold Charges

Full details of Ground Rent & Service Charges needs to be included on the application under ‘other committed expenditure’ 

New build Structural Warranties

We will only lend on New Builds/ Renovations where one of the following 10 year or more Structural Warranties are in place:

• NHBC
• Zurich Municipal (not available from August 09)
• Trenwick International (N/A for Northern Ireland)
• Premier Guarantee
• Build Zone & Buildcare (N/A for Northern Ireland)
• Building Lifeplans Limited (BLP, Allianz Guarantee )
• Ward Cole (12 year structural warranty) - (N/A for Northern Ireland)
• LABC (New Home Warranty – not self build) - (N/A for Northern Ireland)
• Castle 10 ( Checkmate)
• Build Assure (New Home Structural Defects Insurance)
• Global Home Warranties
• The Q Policy
• Protek New Home Warranty
• Aedis Group Homeproof Structural Warranties
• Advantage Warranties
• International Construction Warranties
• One Guarantee Ltd
• ABC+ Warranty & Architects Certificate
• BOPAS (Build Offsite Assurance Scheme) - (N/A for Northern Ireland)
• Ark Residential New Build Latent Defects Insurance

* Premier Guarantee Warranties for flats will be referred to us by the acting solicitor – check the amount of cover at least equals the reinstatement figure on the Valuation report.

Professional Consultant Certificate

In the absence of any of the above warranties we will accept a Professional Consultant Certificate, from a suitably qualified professional, if provided in the format detailed in the CML Lenders Handbook. The Solicitor acting for the Bank should confirm the requirements are met and that the Certificate was issued prior to exchange of contracts. Architects certificates without the benefit of the Professional Consultant Certificate are not acceptable.

Structural warranties issued retrospectively cannot be accepted.

• 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.

For Non New Build applications, Mortgage offers are valid for 6 months, and can be extended by a further month using the appropriate offer extension form.

One month offer extension form

For New Build applications, an extension can be requested on two further occasions for a maximum period of three months each. The first extension should be requested within thirty days of the initial 6 month offer period expiring.

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 refreshed property valuation that's free.

Equally as important, the original deal will still be valid or customers can choose a new deal. This means that if there is a delay in the completion of the property the customer won’t miss out on their chosen deal, which would be especially beneficial if rates rise.

Offers can be extended twice, any 3 month extension granted will apply from the date the offer expired

Offer extension applications should be submitted within thirty days of the initial offer period or within 30 days of the first offer extension expiring.

To apply for a new build offer extension, please use the below form:

New Build Offer Extension Form

Please consult our Income and Packaging Guide

Pilot/Cabin crew can have multiple elements to their income (See Additional Income section) that may also benefit from tax relief, which is acceptable. Please note that expenses payments or reimbursement for costs cannot be used as income.

• To obtain a Mortgage Illustration for your customer, go to our forms and guides section and complete the Mortgage illustration request form.  

• Ported applications can be submitted online and the generic ‘Ported Product’ should be selected from the drop down product menu.  Full details of the product mix should be supplied in the additional information section.

You can obtain your illustration by submitting the mortgage illustration request form on our website under forms and guides.

The application will need card details to be entered to be able to submit. If there is a top up product which comes with a free valuation the fee will not be payable but if it is a like for like port or the top up product does not have a free valuation a valuation fee will be payable.

Log in and complete the customer details in the usual way.  Select the client type as a ‘New Customer’. Key in the existing mortgage and state that this is to be redeemed.

When keying the full application (not on AIP) on the ‘New Loan Details’ screen there is a question relating to porting, you state ‘Ported Product’ in the ‘Product Details’ section, do not enter the top up product details here.  

In the notes section please provide: -  

The case reference of the existing NatWest Mortgage

The existing rate of the product to be ported

The amount and rate of any top up product (if applicable)

• Applications have a 6 month porting window, as per the customers mortgage illustration
• We do not consider porting applications where the customer’s existing mortgage has already been redeemed on/before the date that they apply for the new mortgage OR they already own/co-own the property they are seeking a new application on.
• Please note that a new business rate should be selected for any top up borrowing on porting cases in excess of £10,000
• If a customer is within the last 6 months of an existing deal, based on the new mortgage application date, you can request to use new business products through your BDM and LiveTALK
• For customers of the below brands who wish to port, the customer must contact the number below directly:
• The One Account: contact TOA new business sales on to 03453 01 01 01.
  
• First Active: contact First Active mortgage sales support team on 08453 011 301.
• Ulster Bank: contact Ulster on 02890 276 431
• 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 in the future. Currently, where the customer is looking to do this and their existing term goes into retirement, they should contact us directly
• Customers looking to port an old Metro mortgage, they can do this by calling us directly on: 0345 302 0190

If you have any questions regarding the Product Transfer process for former Metro Bank customers, please review these FAQs

Converting the mortgage from joint to sole names

The mortgage can be amended from joint names to sole name.

This would mean that an existing party to the mortgage is removed - and the remaining mortgage holder transfers the mortgage rate onto a new mortgage – we refer to this as porting.

We would require written consent from the party being removed before we can proceed.

This written consent must confirm that:

• they are happy for the other party to port this mortgage product in their sole name
• they won’t be porting the rate themselves
• if an Early Redemption Charge (ERC) has been paid when the existing mortgage was redeemed, this will be fully refunded to the person porting the rate once the new mortgage completes. 

The customer porting the mortgage rate must be aware that an ERC will be payable unless the repayment of the existing mortgage and completion of the new mortgage happen on the same day.  

There should be six months of continuous employment, although this doesn't need to be with the same employer. In the event of a joint application where affordability is met based on the main applicants income only, there is no requirement for the joint party to meet the continuous employment requirements. 

Applications can be considered from graduates who are in full time employment and completing a period of probation, as it is rare for permanent status not to be confirmed.

Residential mortgages: 0.35% gross (DA firms), or 0.40% gross (AR firms).

Buy-to-let mortgages: 0.45% gross (both DA and AR firms).

Product Transfer: 0.20% gross (both DA and AR firms).

See 'Solicitors' fees'

The following methods are acceptable:

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

Portfolio Landlord/First Time buyer:

• We will not allow any new application to go past the customer’s retirement age.

Small Landlord/Remo Like for Like:

• The application can go past the customer’s retirement age.
• The application is based on ICR rather than personal income, therefore no evidence of pension or retirement income is required regardless of how far away retirement is.

The max age for all applications is 80

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

We can consider Seafarers income if this is paid in an acceptable currency to NatWest and can be evidenced via payslips and, where tax is not paid at source, the most recent SA302 to confirm that the client is registered for UK tax.

The client must also have permanent right to reside in the UK, have settled or pre-settled status or Irish Citizenship AND must live in the UK when not at sea.

The evidence requirements will depend on the customer's employment type. Please see our Income and Packaging guide. 

We allow search indemnity insurance arranged by a clients solicitor for England, Scotland, Wales and Northern Ireland, providing the search insurance adequately protects us and the solicitor is able to certify that the title is good and marketable.

The search indemnity policy will cover local authority searches rather than Land Registry searches. We would still expect solicitors to carry out Land Registry searches (this can be done online for £3).

We will accept personal searches, provided that the search agent has the adequate professional indemnity insurance and the solicitor can still give a clear Certificate of Title.

We can consider cases where the property has a 2nd charge, subject to a Deed of Postponement (DoP), to ensure we hold 1st legal charge.

In this instance the customer would be required to pay a registration fee for the DoP to Land Registry.

Before we issue the offer, we must receive consent from the customer to reach out to the 2nd charge lender to proceed with the DoP. The 2nd charge holder will need to consent that our charge will have priority over their charge. The documents need to be signed and posted to us.

Any fees charged by the second charge holder will be met by the customer.

In a case where a second charge is being redeemed before completion, a future dated redemption statement needs to be submitted for us to issue the offer.

We require a minimum of six months employment to utilise the income from a 2nd job.

We can consider 2nd residential properties up to 95% . The mortgage payment and any other property relating costs for their existing property must be included in the affordability as commitments. 

We can consider a property with solar panels subject to Valuer’s comments. If they are leased, the installation company needs to be listed:

Click the following link to view acceptable leased solar panels:

http://www.microgenerationcertification.org/consumers/installer-search

Properties in Northern Ireland with solar panels are not acceptable.

• We will take an average of the last two years' net profits to assess affordability. For applicants who are self-employed on a partnership basis, we will take an average of their personal share of the net profit over the last two years.
• For self-employed applicants where there has been a reduction in profits/income from the previous year to the most recent year, underwriters may use the most recent lower figure, rather than an average of the last two years.

For more information, please consult our Self Employed Hub.

We have a panel of solicitors for our fees assisted remortgage service. There is no charge to the customer for a standard remortgage loan below £2 million.  All of our panel commit to charging the same scale of fees for any additional services which a customer may require. Please refer to our list of these fees for England & Wales and Scotland.

Our Underwriters may ask for packaging in relation to these applications, but it is not standard.

Gifted Deposit Letter

Acceptable property tenure: Feuhold, Freehold, Leasehold and Sub-Leasehold.

• Minimum term is 3 years
• Residential - Maximum term of 40 years for a Capital and Interest loan
• Maximum term is 35 years for an Interest Only/Mixed loan (30 years for an interest only loan of more than £500,000)
• Buy to let - Maximum term of 35 years

• Often received by staff in the hospitality industry
•  This should be treated as commission and evidenced in line with commission requirements

A free valuation is available for purchases where the lower of the purchase price or value is less than or equal to £3m.  The free valuation is applicable per property, rather than per application.

Where a free valuation applies, we will complete our own checks to make sure a property meets our lending criteria. This may not be a physical inspection of the property. We may use an Automated Valuation Model (AVM), or do the valuation on a desktop. This check is FOR THE BANK’S USE ONLY. Your client will not be charged for this.

We highly recommend that your client considers carrying out their own checks to satisfy themselves of the property value and condition before completing the purchase. 

Information on valuations and surveys is available at: https://www.natwest.com/mortgages/mortgage-guides/what-is-a-mortgage-valuation.html

• Valuation challenges will now only be accepted if it meets one of the following criteria:
• 1)      Factual error on the valuation instruction.
• 2)      The property is a New Build and there are relevant recent comparables on the same site.
• *A Valuation Challenge Form is only required when challenging a New Build Property. Where a Factual error has been made, please call us we will liaise to the valuer.

Where a valuation fee is applicable, we will provide customers with a full valuation fee refund if their applications are declined on the grounds of affordability or credit scoring or where we cannot lend the full amount requested due to affordability issues (unless they have requested to instruct a valuation on own risk as per below).

For loans where the purchase price is above £3,000,000 our processing team will contact you prior to the valuation instruction and we adhere to the following process:

·         Purchases – where the valuation fee is applicable, the customer is given the choice between whether the valuation is instructed on Day 2 at the clients own risk following receipt of application or wait until the case is fully agreed by an underwriter (Please note that if the customer does proceed and the valuation is instructed at clients own risk, they could lose the fee if the valuation is carried out but they withdraw.)

·         Purchases – Please consult our Service Levels page for current processing times (bank is covering cost)

·         Remortgage – Please consult our Service Levels page for current processing times

A valuation will always be obtained via a Panel Surveyor instructed by us.

The applicant may need to pay for a valuation report. Where a fee is payable, it is based on the purchase price, or estimated value of the property. 

Remortgage applications - the fees-assisted package applies to loans of up to £2 million.  This includes a free valuation regardless of the loan amount and legals for loans of up to and including £2million for a standard remortgage.  There may be instances where a customer may not qualify for this.  Please refer to LiveTALK or your BDM.