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Lending criteria

All the facts and figures on one handy page


Additional borrowing / capital raising

Where a customer is remortgaging to Digital Mortgages by Atom bank and wants to borrow extra funds it should be allowed, up to standard LTV limits and within the context of our current product offering, providing we’re happy with the purpose of the loan and the application meets our affordability criteria.

Examples of acceptable loan purposes include (but are not limited to):

  • Structural/non-structural home improvements

  • Repayment of a Help to Buy equity loan (should be input into the system as “repay second charge”)

  • Buying final share in shared ownership

  • Buying the freehold or a new extended lease

  • Buying land to extend the current property

  • Purchasing another property. Please note that details of the property will be required (as we do not accept applications for speculative property purchase) including, but not limited to:-

    • Property address
    • Confirmed mortgage costs (if applicable)
    • Forecast rental income (if applicable)
  • Buying a car, caravan, or boat

  • Paying off a second charge
  • Debt consolidation (except for Right to Buy)
  • Buying out joint borrower (transfer of equity) 
  • Paying for school fees or childcare
  • Paying for holidays.

We’ll complete a reasonability assessment based on the amount and purpose of the additional borrowing and may seek additional evidence for the borrowing or, in some circumstances, we may not be able to lend.

We won’t allow additional borrowing or the option to raise capital for the following, non-exhaustive, list of reasons:

  • Purchase of another property where a sale is yet to be agreed

  • Purchase of another property at auction
  • Purchase of a timeshare property
  • Payment of a tax bill
  • Business purposes

  • The purchase of stocks and shares

  • Currency speculation

If the borrowing is to support home improvements and is more than 15% of the property value, we may require cost estimates prior to approval. Please see the Home improvements section in our lending criteria for more information. 

If you are unsure whether we’ll accept the purpose of borrowing, please contact our dedicated Intermediary Support team


In all cases we will appoint a conveyancer to act for Digital Mortgages. 


Where the product selected is fees assisted, the conveyancer will be automatically allocated from our restricted panel. The “fees assisted” element of the product covers the base legal fees only and excludes disbursements and any additional fees. The customer will have to pay the cost of any additional fees. These will be confirmed to the customer by the conveyancer. Below is a non-exhaustive list of circumstances that would incur additional legal fees:-

  • Where a party is being added or removed from the current mortgage (transfer of equity);
  • Where a second or subsequent charge is registered against the property:
  • Where the property is leasehold
  • Where the customer is buying the final share of a shared ownership agreement or repaying their Help to Buy equity loan in full (repay second charge). Please be aware that they may also incur extra costs in this process, for example - valuations for the agent's purposes
  • Where the property is currently free of debt or any other financial liability

Conveyancing charges explained

Download the fees leaflets from LMS to see the fees that apply to your cases: 

Customer Paid - England and Wales (PDF)

Customer Paid - Scotland (PDF)

Customer Paid - Northern Ireland (PDF)

Fees Assisted - England and Wales (PDF)

Fees Assisted - Northern Ireland (PDF)

Fees Assisted - Scotland (PDF)

Separate Representation - England and Wales (PDF)

Separate Representation - Northern Ireland (PDF)

Separate Representation - Scotland (PDF)

Address history

All applicants must have, and be able to evidence, a three year address history.

All applicants must have been resident in the UK for at least the last 12 months.

The only exception to this is where the applicant is in the British Armed Forces and has a current BFPO address, along with a three year BFPO or UK address history. See BFPO section for more information.

Adverse credit history (Resi)

All applicants will go through credit reference checks, so we recommend that your client reviews their credit file in advance of completing their application to make sure all of the information is correct.

Applications with more than one instance of adverse credit history will be declined. 

Digital Mortgages may be prepared to consider applicants with single, isolated and minor instances of adverse credit history, and where likelihood of recurrence is assessed as low, in line with the table below:

 
Adverse credit found Policy
Bankruptcy/Sequestration
  • Must have been discharged more than six years ago.
County Court Judgements (CCJs)
  • No CCJs allowed within last six months
  • Where there is one satisfied CCJ for up to £500, the application may be considered subject to satisfactory credit score
  • Where there is one unsatisfied CCJ for up to £250, the application may be considered subject to satisfactory credit score
  • Where there has been more than one CCJ in total, the application will be declined.
Defaults
  • No defaults allowed within last six months
  • Where there is one satisfied default for up to £500, the application may be considered where this is an isolated incident and subject to satisfactory credit score
  • Where there is one unsatisfied default for up to £250, the application may be considered where this is an isolated incident and subject to satisfactory credit score
  • Where there has been more than one default in total, the application will be declined. 
Individual Voluntary Arrangement (IVA) / Trust Deed
  • Must have been completed more than six years ago.

Mortgage / secured loan arrears

(by this we mean any instance where agreed repayments to the account are made later than their due date)

  • Account must currently be up to date
  • Account must not have been in arrears within the last 12 months
  • Where account has been a maximum of one month in arrears between 12 and 36 months ago, the application may be considered where this is an isolated incident and subject to satisfactory credit score
  • Where there has been more than one instance of arrears in total, the application will be declined.
Arrears on an unsecured loan or hire purchase

(by this we mean any instance where agreed repayments to the account are made later than their due date) 
  • Account must currently be up to date
  • Where account has been a maximum of one month in arrears in the last 12 months, the application may be considered where this is an isolated incident and subject to satisfactory credit score
  • Where there has been more than one instance of arrears in total, the application will be declined.
     
Arrears on a credit card, store card, mail order, communications accounts, or exceeding an authorised overdraft limit. 

(by this we mean any instance where agreed repayments to the account are made later than their due date, where an overdraft balance has been greater than the overdraft limit or where cheques, direct debits and standing orders have been bounced to keep an account in order)
  • Account must currently be up to date.
  • Where account has been a maximum of two months in arrears, the application may be considered where this is an isolated incident and subject to satisfactory credit score
  • Where there has been more than one instance of arrears in total, the application will be declined.
Repossession
  • Where this has occurred more than six years ago the application may be considered where this is an isolated incident and subject to satisfactory credit score.
Debt Management Plan
  • Must have been completed more than six years ago.

Affordability and Income Multiples

Before you submit any application we recommend using our affordability calculator. This will provide you with a predicted borrowing figure for your clients, based on their personal circumstances.

Digital Mortgages use a comprehensive affordability calculation which takes into account the applicant's levels of income and expenditure, but will always be subject to a maximum loan amount of:

  • 4.5 x income - single
  • 4.5 x income - joint

Expenditure

The applicants will need to provide accurate expenditure information including:

  • Any credit commitments; note credit cards and overdrafts will be taken at 5% of balance
  • Basic essential expenditure (childcare, food, laundry, utilities, telephone, council tax, buildings insurance, ground rent / service charges, essential travel) 
  • Average quality of living costs (clothing, household goods, personal goods, basic recreation) 

Where an existing fixed term credit facility has less than six months to run then we'll normally disregard that, however this still needs to be keyed onto the application.

All information supplied will be cross-referenced against the applicant's credit bureau record, bank statements and proof of income to verify that everything's been declared and that the figures are accurate.

Age

For a residential mortgage, applicants need to be:
  • at least 18 years old when applying;
  • no more than 80 years old when the mortgage ends.

Applicants living outside the UK

The only applications we’ll consider from those living outside the UK are from British Armed Forces personnel that are currently stationed abroad with a BFPO address.

Assignable contracts

We don’t currently accept applications for mortgages against assignable contracts.

Back to back transactions

We don’t currently accept applications for mortgages against back to back transactions.

 

Background Buy To Let (BTL)

If an applicant has existing BTL mortgages that will continue on completion of the new residential mortgage both the BTL mortgage payment and the related rental income will be captured. These values will be used in the calculation of affordability as follows:-

  • 100% of mortgage payment will be included in Committed Monthly Expenditure; and

  • 50% of gross rental income will be included in Income

If an applicant receives rental income from an unencumbered property 50% of the rental income will be included in Income.

Bridging loans

We don't currently accept applications for mortgages to be used as bridging loans.

Buy to Let (BTL)

We don't currently offer BTL. 

Concessionary Purchase

When a purchase is at a discounted value from an immediate family member, we will base the loan to value on the valuation of the property. The maximum loan amount is the discounted purchase price. 

Unless your customer’s Mortgage Offer states otherwise, the property must be their main residence and should not be let or sublet without our permission.

They can ask for CTL at any time if they want to let out some or all of the property. We’d usually expect this to be a minimum of six months after completion but we’ll base our decision on the customer’s personal circumstances and our current lending criteria at the time.

We may need to complete a rental valuation on the property, which your customer may have to pay for. Please view our price list for further information. 

If we agree that your customer can let the property out, we may charge a Consent to Let fee, to reflect the increased risk involved in rental properties. Please view our price list for further information. 

Contractors/Non-permanent employments

Employed

Digital Mortgages can consider certain forms of non-permanent employment or temporary contracts as equivalent to permanent employment. We will consider applications in either of the acceptable categories subject to the provision of the following information:

  • Previous contract history

  • Length of time with current employer

  • If the contract has been renewed before

  • Remaining term of the current contract

  • The prospects of renewal/ obtaining alternative employment in the same type of work at a similar salary

  • Whether the contract is connected to a specific project.


Professional contractors e.g. IT, business consultancy, project management

Digital Mortgages contractor policy is designed to recognise a hybrid employment type that sits between Permanent Employment and Self-Employment for professional individuals.


Applicant Criteria:

  • Minimum day rate £250 or minimum annual income is £50,000

  • Evidence that such temporary contracts have produced a regular income flow over at least one year, either through a single contract or a combination of contracts (with less than two months ‘downtime’ between each)

  • Must have a minimum of one years previous employment in same field (which they could evidence by way of previous P60)

  • Applicant must supply their annual income figure and their day rate

  • Digital Mortgages will assess annual income as the lower of day rate x5 x46 and supplied annual income. The assessed value will be used in calculation of FDI

 

If the above criteria cannot be satisfied then contract workers will be treated as self-employed therefore two years' accounts or two years' HMRC self-assessments (SA302s or Online Tax Calculations) will be required to evidence income.

 

Bank or supply contracts e.g. bank nursing, supply teaching, etc.

Digital Mortgages recognise employment where qualified professionals are engaged in irregular working patterns, especially key workers, and will accept income from these workers based on the following criteria:-

  • Minimum annual income is £20,000

  • Employment directly or via an agency are both acceptable

  • Evidence can be shown that such temporary contracts have produced a regular income flow over at least one year, either through a single contract or a combination of contracts (with less than two months ‘downtime’ between each)

  • Must have a minimum of one years previous employment in same field (which they could evidence by way of previous P60)

  • Applicant must supply their annual income figure. Where an applicant has contract income in addition to salaried income in the same field (e.g. nursing overtime) the applicant can be considered as employed and the total income can be used in calculation of FDI


Zero hour contracts and agency workers
Digital Mortgages recognises employment where qualified professionals are engaged in irregular working patterns and zero hour contracts, and will accept income from these workers based on the following criteria:

  • Minimum time in current employment 24 months

  • Last month’s payslip and last 2 P60s

  • Eligible income will be the average of the last 2 years income evidenced by P60, unless the
    latest P60 figure is lower or the annualised YTD figure from the latest payslip is lower then the
    lower figure will apply.
     

Fixed Term Contract

Digital Mortgages recognises employment where qualified professionals take on shorter, defined employment contracts and will accept income from these workers based on the following criteria:
• Minimum £25k annual income
• Minimum 12 months contracting experience,unless there is less than 6 months remaining on
the current contract in which case minimum 24 months contracting experience will be
required
• Minimum 12 months experience in a similar field
• Latest month’s payslip and last P60 will be required as proof of income.
 
If none of the above criteria can be satisfied then contract workers will be treated as self-employed therefore two years’ accounts or two years’ HMRC self-assessments (SA302s or Online Tax Calculations) will have to be provided to evidence income.

 

Construction Industry Scheme (CIS)
Those working under the CIS will be treated as self-employed, and therefore two years’ accounts or two years’ HMRC self-assessments (SA302s or Online Tax Calculations) will have to be provided. 

Conveyancing

Every mortgage application with Digital Mortgages will have the legal work for the transaction (known as conveyancing) completed by one of the conveyancing firms who make up Digital Mortgages' residential mortgages legal panel. 

Fees Assisted Products

For applications on fees assisted products, the firm that completes the legal work is determined by our panel manager, LMS, who will allocate the case to a panel firm based on the type of application, the location of the property and a number of other factors. We are unable to influence or dictate which firm is allocated to an application. 

Please note that the fees assisted legal work covers basic legal fees only, and any additional or non-standard work will be subject to charge, payable by the applicant(s).

To understand the fees associated with conveyancing, please view our price list and the conveyancing fees leaflets. 

If a customer does not wish to use the law firm appointed by Digital Mortgages they either need to select a non-fees assisted product, if available, or proceed on a separate representation basis. Please see below. 

Non-Fees Assisted Products 

For applications on non-fees assisted products, the customer(s) will be able to select a conveyancing firm from Digital Mortgages’ general legal panel, operated by LMS. Any costs associated with the conveyancing will need to be negotiated directly between the customer and the selected firm. 

You will be able to make your selection at the point of application, via a search tool using the Name, Town or Postcode of the firm.

If the preferred firm is not on the Digital Mortgages panel, they can apply to be added via LMS conveyancer zone. Providing the firm meets our panel criteria, LMS will add them to our panel on receipt of the relevant panel application documentation. Please note that until a firm is successfully added to the panel, the application cannot be submitted using that firm and you should wait until they have been approved, do not submit the case by selecting a different conveyancer if you do not intend to complete with that firm. When a firm is selected at application, they will be instructed immediately and automatically on application submission. The acting conveyancing firm can only be changed in exceptional circumstances.

If the preferred firm is not on the Digital Mortgages panel, and is not eligible to join, then the options available to the customer(s) are either to select another firm from the Conveyancing Panel or to proceed on a separate representation basis.

Separate Representation 

For applications on fees assisted products where the customer does not wish to use the Digital Mortgages allocated conveyancer for their own legal work, or for non-fees assisted products where the customer’s preferred firm is not on Digital Mortgages Conveyancing Panel, the customer(s) will be able to proceed on a separate representation basis.

This means that whilst the customer’s legal work is completed by their own conveyancer, Digital Mortgages will also instruct a conveyancing firm (from our panel) to oversee the work completed by the customer’s firm. 

Please note that where separate representation is selected, the customer(s) will be liable for the cost of their own conveyancer as well as the cost of the Digital Mortgages conveyancer.

To understand the fees associated with conveyancing, please view our price list and the conveyancing fees leaflets. 

 

 

 

Credit Card Commitments

Where a customer(s)'s level of credit card usage over the last 6 months is assessed as being high, their application will be declined where any of the following conditions are met: 

  • Loan to value is greater than 85% 
  • Loan to affordability (meaning the loan amount requested as a % of the max loan amount generated at DIP) is greater than 90%
  • The customer's current debt to income level is greater than 30% (meaning their total monthly payments to credit commitment is greater than 30% of their allowable monthly income as assessed by Digital Mortgages)

Credit scoring

All mortgage applications are credit scored. To determine the score, we use a combination of the customer’s application data and credit bureau data to help us to build a clearer picture of the applicant’s finances.

We use Callcredit to inform our credit searches. 

If the applicant can’t satisfy our minimum acceptable mortgage score requirement, then the application will be declined.

 

Debt to Income Ratio (DTI)

Where the customer is currently highly indebted, further checks on affordability will be carried out. 

The applicant's unsecured debt to income ratio will be calculated as the total monthly payments to unsecured credit commitments / net monthly income. 

Where current DTI is more than or equal to 50% the application will be declined.

Decision in Principle

Our DIP facility is available on our intermediary portal.

The DIP provides a preliminary agreement that the applicant meets our main lending and affordability criteria. It will detail how much we may lend, is valid for 90 calendar days and is subject to:

  • A full check against our lending and affordability criteria

  • The receipt of a full and satisfactory property valuation

  • The supplemental information being approved in order to progress to a mortgage offer


Completing a DIP will place an enquiry footprint (a soft footprint) on the applicant’s credit file.

A DIP is not a guarantee of the overall acceptability of the mortgage application. Each application is subject to final approval by our underwriting or mortgage processing team, who will carefully assess all applicant information together with supporting documentation and evidence concerning both the applicants and the property.

On submission of the Full Mortgage Application, an updated credit bureau report will be requested and a  “hard” credit search footprint will be applied to the customer’s credit file. Please note that  any significant changes to the customer's credit record, including changes in credit account performance and  increases in credit commitments may impact the overall lending decision and/ or maximum loan amount available.

Dependents

For affordability, any persons who are dependent on the applicant(s) but who are not named on the mortgage must be entered as a dependent on the application.


An adult dependent can be defined as:

  • A husband, wife, partner or civil partner who relies either entirely or almost entirely on an applicant for financial support and is not named on the mortgage

  • A relative such as a parent or grandparent who relies either entirely or almost entirely on an applicant for financial support and is not named on the mortgage

  • Where the adult dependent is named on the mortgage application, they should not be input as a dependent as they will already be factored into the affordability calculation


Any child (aged under 17) who is dependent on the applicant(s) should be declared on the application as a “dependent child”.


Deposit

The deposit for any purchase should typically come from the applicant's own resources. We don't accept monies from secured/unsecured loans as deposits, with the exception of equity released from an existing property, e.g. in a let to buy application. 

Unacceptable deposit sources include, but is not limited to:

  • Money raised via a secured loan (including Help to Buy)
  • Money raised by an unsecured loan
  • Vendor cash deposits
  • Directors loans

We'll accept a gifted deposit where: 

  • No interest in the property is claimed by the third party, and, 
  • The donor has not and will not live in the property

To satisfy our policy requirements you'll need to submit a completed Digital Mortgages declaration form at application. This is available at https://residential.digitalmortgages.net/documents

As part of the conveyancing process, the gift donor(s) will be required to complete a standard gifted deposit form as provided by the conveyancer. This will include an enquiry as to the source of funds. 

For residential applications, we might ask for proof of deposit, for example if a first time buyer is looking to put down an unusually large deposit.

EEA nationals

British and EEA (European Economic Area) nationals must have been living in the UK for a minimum of 12 months prior to application to be considered for a mortgage with us. Due to EEA and/ or EU agreements, those from the following countries will be treated as EEA nationals for mortgage purposes:

  • Iceland
  • Liechtenstein 
  • Norway 
  • Switzerland

Applicants who have not been resident in the UK for at least 36 months will be restricted to 75% LTV.

UK nationals who have been working overseas in a similar role to their current employment and who have been back in the UK for at least 12 months are not subject to a restricted LTV and will be assessed against standard criteria. 
 

Employment

Employed Applicants

Applicants must provide a 24 months employment history, and will be expected to have a minimum 12 months in employment. A minimum one month will be required in their current role, supported by at least one payslip from their current employer and must be considered a permanent employee. Employment references may be requested.

 
If the applicant has been employed for less than 24 months, they will need to provide details of their employment history within this time.
 

Digital Mortgages can lend to applicants currently in a probation period subject to the following criteria:

  • For primary earners i.e. the lead applicant, the following will apply:

    • If the applicant has been employed in their current role for less than six months regardless of them being in a probationary period or not Digital Mortgages will require:

      • 12 months continuous employment in the previous role

      • A minimum provision of the first full month's payslip in the new role.

    • If the applicant has been in their current role for more than six months, normal criteria will apply.

  • For secondary applicants the following will apply:

    • If the applicant has been employed in their current role for less than three months regardless of them being in a probationary period or not Digital Mortgages will require:

      • 12 months continuous employment in the previous role

      • A minimum provision of the first month's payslip in the new role.


Pay rises and job offers

Where a pay rise is due to take effect within one month of application it can be considered subject to the provision of a letter from the applicant's employer (we'll accept a letter addressed to the applicant from the employer as confirmation). If the applicant works for a family business future pay rises cannot be considered. Employment references may be requested. 

 

Job offers cannot be considered. 

For Contractors and Self Employed applicants, please see the relevant section of our lending criteria.

Energy Performance Certificate (EPC) rating

We don’t currently apply any restriction on the minimum EPC rating of a property that’s subject to a residential mortgage.

Expatriates

We don't currently lend to British expatriates, as applicants must have been resident in the UK for at least the last 12 months in order for us to consider lending. 

The only exception to this is where the applicant is currently in the British Armed Forces with a BFPO address, and where the last three years' addresses are either UK addresses or BFPO addresses.

Finder's fees

We’re happy to lend against residential properties that involve the payment of finder’s fees (fee or commission based). Please note, finder’s fees need to be paid by the applicant and can’t be added to the mortgage advance.

First time buyers (FTB)

We define a FTB as someone who has never previously held a residential or BTL mortgage in the UK.

All applicants must meet our definition of a FTB, to apply for a FTB product. 

Fixed term leave from work

For parental leave (including maternity, paternity, adoption) 

  • Applicant to advise of their intention to return to work and return to work date and salary, 
  • The advised return to work salary will be used in our affordability assessment, this can be evidence from last pay slip received before leave commenced.
  • Household numbers to include new child(ren), 
  • Estimated future childcare costs to be included in outgoings 
  • Where the intended leave period is greater than 6 months we will require evidence of savings to cover payments 
  • If intended leave period is 9 months we require proof of a minimum savings amount of 3 x monthly instalment
  • If intended leave period is 12 months we require proof of a minimum savings amount of 6 x monthly instalment

For other fixed term leave (eg career break or sabbatical) 

  • Applicant to advise intention to return to work and return to work date and salary. 
  • Employers reference to confirm return to work details. 
  • Details of leave income. If the leave period is unpaid we will require evidence of savings to cover any loss of income 
  • If unpaid leave period is 3 months we will require proof of a minimum savings amount of 3 x monthly net income. 
  • If unpaid leave period is 6 months we will require proof of a minimum savings amount of 6 x monthly net income. 

Further advance (called additional borrowing in customer communications)

For your information, we call further advances 'additional borrowing' in our customer communications (including their T&Cs and documentation). 

An existing customer may want to seek a further advance from us. 

Any request for a further advance will be subject to our current product offering and our lending criteria at the time of application, and will be subject to an affordability assessment. For our latest further advance rates and products, please contact our TBDM team. 

A further advance won’t be permitted within six months of completion of the original mortgage, where there have been, or are any arrears on the current mortgage account or where a second charge is held on the property. All applications will be subject to our standard maximum LTV levels and a minimum loan amount of £25,001. 

For all enquiries about this please contact our Telephone Business Development team on 0333 399 0055

Examples of acceptable loan purposes include: 

  • Structural/ non-structural home improvements 
  • Buying a car, caravan or boat
  • Buying furniture, electrical or white goods
  • Paying for school fees or childcare
  • Paying for holidays
  • Paying for weddings
  • Debt consolidation (except for right to buy) 

Examples of unacceptable loan purposes include (but are not limited to): 

  • Buying a building plot
  • Buying land to extend the security
  • Purchase of another property
  • Purchase of a timeshare property
  • Business purposes
  • Purchase of stocks & shares
  • Currency speculation
  • Payment of a tax bill
  • Pay off a second charge
  • Buying the freehold or new extended lease
  • Buying a share in a freehold
  • Buying additional/ final share in shared ownership. 

In some circumstances there may be additional legal costs to be paid. Our further advance products come with a free basic valuation, any upgrade to this will carry a cost. Where possible we’ll use an Automatic Valuation Model (AVM).

 

Home improvements

If the customer's application includes capital raising of more than 15% of the property value for home improvements, the maximum LTV will be 85% and the mortgage amount will be capped at 80% of the maximum amount allowed by our affordability calculator. 

If a customer wants to carry out home improvements or remedial work on a property, and requires a further advance or capital raising of more than 15% of the property value, we'll need written estimates, along with sight of any necessary planning permissions or building consents. 

Please note, further advances are only available on selected Digital Mortgage products. If you are unsure if your customer is eligible, please contact us.

We're unable to lend on the future value of a property, so all lending will be based on the current value of the property.

Identification

As we’re a digital bank, we’ll always attempt to electronically identify and verify customers (ID&V) using the information provided by Credit Reference Agencies.

Where we’re unable to do this, we’ll need to see the following documents (exactly what we need will be advised as part of our automated Decision in Principle):

Personal ID (government issued document with a photograph) Address ID 
Current Passport Current UK (photo card/old paper style) driving licence
Current UK or EEA photo card driving licence Statement dated within last three months from a UK authorised financial services firm. We will accept full statements printed from the internet but not screen prints
Firearms certificate or shotgun licence Building Society passbook
Identity card issued by the Electoral Office for Northern Ireland Utility bill (not mobile phone) dated within last three months. We will accept full statements printed from the internet but not screen prints

Recent evidence of entitlement to a state or local authority funded benefit (including housing benefit and council tax benefit), tax credit, pension, educational or other grant
  Local authority council tax statement or demand for payment
  Recent correspondence (dated within last 3 months) from HMRC
  Residence permit issued by Home Office

Income types and verification

All applications will be subject to verification of income.

Please ensure the main earner is entered as applicant 1 when keying the case.

As a digital bank, Digital Mortgages may, in certain cases, use information held at the credit bureau to verify income. If we are able to do this, we won’t ask for any income verification on the DIP.

When you have completed the DIP  you will find a list of requirements unique to the case generated in our broker portal. 

In this table you’ll find the types of income we accept and the percentage used to assess affordability and standard evidence required. Where possible we’ll verify the applicant’s income with the credit bureau so you won’t have to send us any supporting documents.

If we can’t do this we reserve the right to request further evidence if deemed necessary, such as bank statements or formal ID. Where bank statements are requested they must show income and expenditure across a full month.

Income type  Percentage allowed Evidence Required 
 Basic salary   100%  The latest monthly payslip
 Area allowance  100%  Last three months payslip
 Car allowance
 100%  Last three months payslip
 Shift allowance
 100%  Last three months payslip
 Housing allowance from employer  100%  Employment contract and three months payslips
 Guaranteed overtime  100% (last year average)   The last three payslips/P60 showing evidence of relevant split between salary,  overtime, bonus and commission
 Guaranteed bonus/commission  100% (last year average)  The last three payslips/P60 showing evidence of relevant split between salary, overtime, bonus and commission
 Sole Trader Net Profits  100% (average of last two year's)  Two years SA302s or  Tax calculations combined with Tax year overviews
 Partnership Share of Net Profit  100% (average of last two year's)   Two years company accounts or Accountant's certificate*
 Limited Company Director's Share of Net Profit  100% (average of last two year's)  Two years company accounts or Accountant's certificate*
 Limited Company Director's Salary  100%   Two years company accounts or Accountant's certificate*
 Limited Liability Partnership Income (LLP)  100%

Two years company accounts.

Where the appointment is too recent to be shown in the accounts, income can be validated by a letter from the managing partner confirming the applicant's partnership share and income for the most recent financial period.

 Pension/annuities  100%  An annual statement of pension/annuity on retirement or latest pension payslip
 Personal Independence Payment, formally Disability allowance (for self)  100%  A letter from the DWP to confirm current entitlement
 2nd job salary  100% (only where a minimum 12 month track record can be evidenced)  As per above requirements for primary job
 Non-guaranteed overtime  50% (last year average)  The last three payslips/P60 showing evidence of relevant split between salary, overtime, bonus and commission
 Non-guaranteed bonus/commission  50% (last year average)  The last three payslips/P60 showing evidence of relevant split between salary, overtime, bonus, commission
 Investment income  50%   Most recent Savings/Investment Account statement, must be dated within the last 12 months
 Rental income  50% (mortgage free properties)  Last three months bank statements showing rental income credits
 Maintenance  50%   A copy of maintenance agreement, CSA assessment or written private agreement evidenced by the latest three months bank statements
 Working family tax credits  Not Accepted  N/A
 Child benefit and child tax credits  Not Accepted  N/A
 Other DWP benefits  Not Accepted  N/A 
 Rent a room  Not Accepted   N/A
 Dividends  Not Accepted  N/A

*Accountants certificate - if you want us to apply an accountant's certificate, rather than sending in accounts, then please email mortgageprocessing@digitalmortgages.net with your request. 

Guaranteed vs. non-guaranteed

For "guaranteed" additional income, we will use 100% in affordability calculations. 

For "non-guaranteed" additional income, we will use 50% in affordability calculations. 

Weekly/ monthly bonus/ commission/ overtime 

Digital Mortgages will consider this as "guaranteed" (see income types table above) where it is shown on every playslip and will take the annualised average from the last three month's payslips. This must be supported by the YTD figure on the most recent payslip. We may also request the applicant's P60. 

Where the payment is not shown on every payslip, this will be treated as "non-guaranteed" (see income types table above).

Quarterly bonus/ commission/ overtime

Digital Mortgages will consider this as “guaranteed” (see income types tables above) where it is shown on the current quarter’s payslip and the last two quarter end payslips (e.g. Current month’s payslip is September, June and March payslip must be provided in addition and should also show the additional income being paid),  and will take the annualised average from those three payslips. This must be supported by the YTD figure on the most recent payslip. We may also request the applicant’s P60.

Where the payment is not shown on every quarter end payslip, this will be treated as "non-guaranteed" (see income types table above) and we will take the lower of the annualised average from the last three months payslips or the annualised YTD or P60 figure.

Annual bonus/ commission

Digital Mortgages will use the latest year's annual bonus/ commission payment in the affordability calculation where: 

  • it has been paid at least once; and
  • it is evidenced on the previous year's P60 or payslip for the month it was paid

This will be treated as "non-guaranteed" (see income types table above) additional income. 

Interest only/ part and part

We don't currently lend for interest only/ part and part mortgages

Joint mortgages

We're happy to accept joint mortgage applications with a maximum of two applicants for residential mortgages.

Lending decision appeals

When we make underwriting decisions, our process is fair, impartial and responsible, but we also understand that in some cases, new information can become available that might change our decision. 

We're happy to review our lending decisions where new, supporting information (that wasn't available at the time of decision) is provided. If this is the case and you'd like to appeal a lending decision, please contact our dedicated Intermediary Support team or your BDM.

Lending into retirement

Digital Mortgages define retirement age as the lower of the applicant’s stated retirement age or age 70 years.

Where the application term extends beyond an applicant’s retirement age, and where retirement is within 10 years of the application date then we’ll assess mortgage affordability based on the post retirement income.  

When we are assessing lending into retirement cases where the applicants are more than 10 years from retirement, we require evidence that reasonable provision has been made and that there is evidence of client behaviour to support themselves into retirement. An example of this would be a track record of paying into a pension for a number of years at a level that would suggest an element of planning has taken place. We would also expect the broker to have fully discussed and assessed the clients lending into retirement plans and be able to provide suitable evidence to support such applications.

Let to Buy

Where a customer has consent to let from their lender for their current property, and are seeking a mortgage from us for their new main residence then their application will be subject to normal policy LTV restrictions. 

The income and expenditure related to the background property will be assessed in line with our background BTL policy.

Lifetime mortgages

We’re not currently accepting applications for lifetime mortgages.

Loan To Value (LTV) limits

The maximum residential LTV percentage depends on the loan amount and type of borrowing.

Loan (£)  Current Max. lending limit
<=£300,000 95%
£300,001 - £500,000 90%
£500,001 - £750,000 85%
£750,001 - £1,000,000 80%
£1,000,001 - £2,000,000 75%


Loan type / Property type  Max LTV 
House purchase / Remortgage  95% 
First-Time Buyers  95%
Flats and apartments purchase / Remortgage  95%
New build houses  85% 
New build flats  80%
Right to buy  95%
Non-UK national applicants resident in the UK for less than three years  75% 

UK nationals with less than 3 years UK address history

Where they have been working overseas in a similar role to their current employment,

and they have at least 12 months UK address history, standard criteria will apply

 75%
Second home / holiday homes  75% 
Sheltered housing schemes / Retirement villages for elderly   75% 

Minimum income

For residential mortgages, the main applicant’s minimum income is £16,000. Where the main applicant earns less than £20,000 per annum but more than £16,000 we will restrict the loan to 80% of the maximum figure displayed in our affordability calculator.

New build

We’ll only provide mortgage finance for new build properties if the property will be fully completed within 12 months of our first mortgage offer.

For residential mortgages, the maximum LTV levels are:

  • New build house 85%.

  • New build flat/apartment 80%.

All new build/converted properties that are less than 10 years old must have appropriate planning permission, as well as an acceptable 10 year structural buildings defects warranty backed by:

  • NHBC

  • Premier Guarantee

  • Building Life Plans

  • Building Zone

  • LABC New Home Warranty

  • Advantage

  • Aedis

  • Checkmate Warranty

  • Construction Register Limited

  • HAPM

  • ICW (International Construction Warranties)

  • Q Assure

  • Zurich Municipal (no longer offered for new property sales)

  • A professional consultant's certificate from a suitable architect/surveyor (they need to be corporate members of the Royal Institute of British Architects or Royal Institution of Chartered Surveyors and have the appropriate professional indemnity insurance).

If the new build property doesn’t have a warranty then the application will be declined.

Builders’ cash incentives also need to be declared at the point of sale, and this can be done via the UK Finance Declaration of Incentives form. We will accept a maximum of 5% without affecting lending. Anything above this will be deducted from the lower of purchase price or valuation and the max LTV will be based on this figure.

Non-EEA nationals

We’re happy to accept non-EEA nationals who have been living in the UK for a minimum of one year, subject to full underwriting, for a maximum LTV of 75% as long as they meet the following criteria:

  • They must be living and working in the UK, and have done so for a minimum of 12 months
  • They need to have indefinite leave or limited leave, with the right to remain in the UK for a minimum of three years, and with no restrictions on employment. Proof of this can come from any of the following:

    • A UK Residence Permit (Biometric Residence Permit)
    • A visa stamp in a currently valid passport
    • Written confirmation from the Border and Immigration Agency/Home Office
    • We're unable to lend to anyone with diplomatic immunity. 

     

Where the Non-EEA national is the second applicant and has been living in the UK for at least 3 years, and the first applicant is a UK national, standard criteria and LTV limits will apply.

Non-simultaneous sale and purchase

Where an existing property is for sale but won’t be sold before the new mortgage completes, the existing mortgage payment is classed as a credit commitment and must be included in the affordability calculation. In this case, it’s expected that:
  • the existing property will be sold within three months of the completion date of the new mortgage; and
  • the customer(s) will move into the new property within one month of completion.
 

Offers

All mortgage offers are valid for 90 days from the date the offer was issued, with the exception of those relating to new build purchases which are valid for 180 days from date of offer.

In all cases, a mortgage offer will be placed in the customer’s Vault, accessible via the Atom bank app.

If the mortgage offer has expired and is still proceeding you must contact us within 15 calendar days following the offer expiry date, failure to do this will result in the application being cancelled without the possibility of reinstatement.  If we have been made aware that the case is still to proceed it will be subject to re-underwriting and may require new case requirements and and/ or valuation before a new offer can be made. The original mortgage product selected may not be available.

Other occupiers

Family members and individuals over the age of 17 who aren’t party to the mortgage, but intend to live in the property, need to sign our standard Deed of Consent form.

If the individual who plans to live in the property provides a lump sum towards the purchase, or is currently named/ previously named on the title they must be included on the application.

 

Overseas employment

We do not offer mortgages to UK nationals who are resident and working overseas, including those intending to return to the UK in the near future. However, where an applicant is currently resident in the UK but works overseas (e.g. offshore oil workers) and is paid in UK sterling only, into a UK bank account which can be evidenced by a payslip, we can consider lending.

Porting

We won't consider an application to port the mortgage until at least six months after completion, unless the customer's circumstances are exceptional. These applications are subject to full lending criteria at the time of porting. 

Further information relating to porting can be viewed in the mortgage terms and conditions in the customer's Vault area of their Atom bank app. 


Product switches

Customers can switch their mortgage product when it matures e.g. when their initial rate finishes.
 
 

 
 

Property construction

The property to be mortgaged should be of standard construction type. For example:
  • Walls:
    • Cavity outer walls of brick/reconstituted stone with inner walls of brick or block
    • Cavity outer walls of brick/reconstituted stone/blocks rendered with inner walls of brick or block
    • Timber framed property with outer walls of brick/reconstituted stone, built in 1980 or after
    • Timber framed property with rendered outer walls of brick/reconstituted stone/block, built in 1980 or after
    • Solid stone
  • Roof:
    • Tile (concrete)
    • Slate
    • Thatch (reed or straw)
    • Felt, asphalt
    • Copper  
    • Lead

We might also accept some properties built using alternative techniques, so please speak to BDM or TBDM to confirm if the construction method is acceptable before applying.

In all cases a satisfactory valuation report needs to be received by Digital Mortgages.

 

Property location

We’re happy to lend against properties in England, Wales, Scotland and Northern Ireland.

However there may be some additional restrictions to property located on remote Scottish islands due to restricted demand. If this affects the application, please speak to your BDM or TBDM first to discuss the suitability of the property before applying.

We don’t currently lend on properties outside the UK including the Isle of Man and the Channel Islands.

Property types

We’ll consider lending on standard property and construction types. In addition we may consider the following types of property, subject to additional checks and a manual underwriting assessment:

  • Flats located five storeys or more above the ground (excluding ex-local authority)

  • Flats above commercial premises - in addition to normal criteria acceptability will depend on:

    • Nearby commercial activities. If any commercial activities in the block are likely to cause a nuisance - noise, smell or unsocial hours - we may not be prepared to lend on the flat

    • Access. Some flats over commercial premises have poor access, which may involve passing through the business area, exiting yards containing commercial refuse, or using poorly maintained external stairs. If any of these factors apply we might not be prepared to lend

  • Studio flats may be considered if they’re located in a prestigious development or location where their desirability and saleability can be confirmed by the valuer.

  • Freehold flats where

    • There are reciprocating lease/freehold arrangements (such as Tyneside Flat).

    • They are subject to the Tenements (Scotland) Act 2004

  • Flying freeholds where this makes up less than 15% of the property where the conveyancer can confirm that subject to confirmation that adequate rights of support and mutually enforceable repairing covenants exist.

  • Properties with over 10 acres (40,000m2) of land will be considered provided the following information is provided at application stage:

    • Full details of the living accommodation

    • Total area of land

    • Current and intended use of the land

    • Number, size, and proposed use of any outbuildings

    • Occupation of the applicant(s)

    • Details of any restrictions on the land or property

Please note: the property won’t be acceptable if it’s subject to any agricultural restrictions, or if the applicants intend to use the land for any agricultural or business purposes.

  • Properties with granny flats/annexes where the acting solicitor confirms that the granny flat or annex will have vacant possession upon completion

  • Right to Buy where the applicants currently live in the property and can supply their Right to Buy papers

  • Warden assisted dwellings

  • Residential properties including rooms used for rental purposes (e.g. Airbnb where only a portion of the property is let)

  • Modern Timber framed properties
  • Section 106 planning restrictions can be considered depending on the exact nature of the restriction

    • Where the restriction imposes developer obligations, for example, inclusion of public amenities, this will be acceptable subject to our conveyancer confirming that the restrictions have been met or that acceptable covenants that they will be met are in place.

    • Where there is a restriction on remarketing of the property e.g. Affordable Housing Schemes or Local Ownership Schemes this will be acceptable provided there is a Mortgagee Exclusion Clause.

    • Where the restriction limits usage of the property e.g. agricultural ties this will not be acceptable.

Unacceptable property types

Unfortunately we’re unable to consider mortgage applications associated with the following types of property (please note that this isn’t an exhaustive list):

  • Commercial premises - either full or partial, including live/work units

  • High rise ex local authority flats (five storeys or more)

  • Freehold flats (excluding those noted above)

  • Flats with balcony access (will be considered on an individual basis)

  • Flats that aren’t self-contained or without independent access

  • Isolated rural properties with restricted access and limited services

  • Bedsits

  • Static caravans

  • Mobile homes

  • River boats

  • Farms

  • Purchase of land

  • Entirely timber constructed properties. e.g. log cabins

  • Pre-cast reinforced concrete construction (unless improved to building regulation standards and confirmed so by a structural engineer)

  • Flying freeholds greater than 15%

  • Grade I listed buildings (may be considered on an individual basis subject to valuers comments)

  • Partially built properties

  • Properties with no kitchen or bathroom - unless being installed by applicants

  • Properties with a restricted occupancy clause, e.g. if they can only be occupied for a maximum of 11 months in any one year

  • Timeshare accommodation

  • Properties where material environmental hazards are revealed by environmental searches;

  • Properties where there’s ongoing structural movement

  • Properties where saleability may be adversely affected by an unsatisfactory mining search;

  • Properties excluded from full buildings insurance

  • Properties affected by planning restrictions or by local planning issues

  • Properties liable to be subject to clearance or compulsory purchase order

  • Properties subject to third party interest

  • Any property deemed unsuitable security by the valuer

Before applying it’s always worth double checking the suitability of the property with our Intermediary Support team.


Property value / purchase price

The minimum and maximum purchase prices that we’re willing to lend against are:

   Purchase Price
 Minimum   Maximum (subject to max. LTV)
Residential    £50,000*    £3,500,000

* Please note where the property is located within the M25 and the property value is less than £100,000 then the application will be subject to additional scrutiny by an underwriter. 

Remortgage

When looking to remortgage with us there are a couple of things to consider:
  • The property must have been owned and occupied by the applicants for at least six months
  • The applicant can look to borrow the same amount or less as the existing mortgage, or an increased amount including an element of capital raising.
If you need to alter the title deeds as part of a remortgage application, there may be legal costs involved and we always recommend that customers take independent legal advice. Please see Transfer of Equity.
 

Repayment Types

Interest-only

We don’t currently offer full interest-only lending.

Capital and Interest

Acceptable for all mortgages

Part and Part (capital and interest / interest-only) not currently available. 

Residential minimum/ maximum loans

  Minimum Loan Maximum Loan (subject to LTV maxima)
Purchase / Remortgage  £25,001  £2,000,000
First Time Buyer (FTB)  £25,001  £2,000,000
 

Retentions

We currently don’t offer mortgage retentions, we simply base our lending on the current value of the property.

Right to Buy

We’re happy to accept Right to Buy applications as long as they meet our standard mortgage lending criteria.

What you need to know and provide:
  • The maximum loan we’ll offer is set at 90% of the discounted purchase price 
  • We don’t allow capital raising for debt consolidation
  • All applicants must currently live in the property 
  • You’ll need to supply us with the applicant’s Right to Buy/Acquire papers detailing the discounted price and confirming their eligibility
  • We also require a landlord’s reference or evidence of rent payments.
If an applicant receives housing benefit this can’t be used as income to support the mortgage as the benefit won’t continue once the mortgage has completed.

Second charges

We’ll only consider allowing second charges to remain, or to be registered on residential mortgages if:

  • We are granted the first legal charge over the property;
  • The applicant(s) complete the appropriate Deed of Priority/Deed of Postponement/Ranking Agreement form.
 

Second home and holiday homes

 

We’re happy to consider mortgages for a second home or holiday home, providing:

  • The applicant demonstrates they can support both mortgages that are outstanding at the time of completion

  • They prove they can afford the cost of running two homes

  • The property is predominantly for the applicant’s own use, however short term occupation by family and friends will be acceptable

  • The property is not to be sublet

The maximum loan to value we’ll offer for this kind of purchase is 75%.

Security

A first legal charge (or equivalent) will be required over all property in England and Wales and over all outright/ Scottish ownership property in Scotland.

If a customer has more than one mortgage with us, the standard Mortgage Conditions will include an ‘All Monies Clause’ which secures on the subject property any other debt that may be due to us, whether under this loan or any other lending facility.

 

Self-build

We don’t currently accept applications for mortgages against self-build properties.

Self-employment

If an applicant has more than a 20% shareholding in the business they work for, we’ll treat them as self-employed, but if their shareholding is 20% or under, we’ll class them as employed.

Applicants who own a franchise or have a partnership interest in a business will be assessed as self-employed, as will sub-contractors who derive income from more than one contract. In all cases, we might seek references from their accountants.

We’d normally expect applicants to have been self-employed for a minimum of two years and for the business to have been profitable throughout that time.

Income for affordability is taken as follows:

  • For self-employed customers, two years finalised net profit figures will be captured on the intermediary portal. The system will determine the average net profit for the applicant by taking a simple average

  • Where the latest year net profit figure is <85% of the average net profit, or is negative i.e. made a loss, then the case will be declined

Construction Industry Scheme (CIS) Contractors will be treated as self-employed. Therefore, two years’ accounts or two years’ HMRC self-assessments (SA302s or Online Tax Calculations) will have to be provided to evidence income.

Limited Liability Partnerships (LLP) - Income from a partner within an LLP is acceptable and can be evidenced by providing two years company accounts. Where the appointment is too recent to be shown in the accounts, income can be validated by a letter from the managing partner confirming the applicant’s partnership share and income for the most recent financial period. 

Shared equity

We don't currently accept applications for shared equality. 

Shared ownership

We don't currently lend on shared ownership properties.

Sheltered housing schemes / retirement villages (Resi)

We can consider applications for residential properties in sheltered housing schemes or retirement villages.

The maximum LTV available on these is 75%, and the full property lease and restrictive covenants must be approved by our solicitors and valuers.

 

Short term loans / payday lending

Short term loans are sometimes associated with customers in financial difficulty or with very limited disposable income on a month to month basis.

Digital Mortgages recognise that this is not always the case and is willing to consider applications with no more than three short term loans within the last six months providing affordability is strong, the applicant(s) shows no signs of credit pressure and subject to satisfactory credit score.

Solar panels

We will consider properties with solar panels where the applicant(s) are funding the purchase of panels themselves or via additional borrowing, providing they are doing so without creating any long term lease arrangement with the panel provider. A condition will be attached to the offer of advance that lending is subject to the appropriate planning permission and consents being in place. 

We will not lend on a property where the panel provider is supplying and fitting panels free of charge, is taking income from the grid tariff scheme and is creating a long term lease against the roof and roof air space. 

Specialist reports

In certain situations the valuer might request a specialist property report prior to the mortgage being offered.

When this happens, we will ask the customer to arrange for the appropriate report to be completed and we’ll forward to the original valuer for comment. The customer will be responsible for covering the cost of the report and for ensuring that the person completing the report holds the qualifications required by us. Please be aware that providing a specialist report does not guarantee that the property will be acceptable to us as security.

Where the valuer requests a structural engineer’s report the customer must ensure that the individual completing the report is a member of either the Institute of Structural Engineers (www.istructe.org.uk) or the Institute of Civil Engineers (www.ice.org.uk). They must also hold one of the following qualifications:

  • Structural Engineer (M.I.C.E, F.I.C.E, M.I. Struct E or F.I Struct E.). 
  • Chartered Building Surveyor (M.R.I.C.S. or F.R.I.C.S.). 
  • Corporate Building/Corporate Structural Engineer (M.A.S.I., F.A.S.I, MBEng., FBEng., M.C.I.O.B. or F.C.I.O.B.)
All other specialist reports need to be prepared by a reputable firm (please refer to valuer for guidance if in any doubt). Some examples of the types of report that our valuer might request, and the qualifications the individual completing the report must hold are listed below:-
  • Cavity wall tie: 
    • Member of the Federation of Master Builders or Member of the British Wall Tie Association.
    • Members of the Wall Tie Installers Federation.
    • Property Care Association (PCA).
  • Damp & Timber: 
    • Property Care Association (PCA).
    • Chartered Building Surveyor (MRICS/FRICS).
    • Member of the Institute of Chartered Engineers or Member of the Institute of Structural Engineers.
  • Drainage: 
    • Specialist contractor with review/recommendations by a Member of the Institute of Chartered or Structural Engineers.
  • Electrical:
    • Member of the Institute of Electrical Engineers.
    • Member of the National Inspection Council for Electrical Installation Contractors.
    • Certified by one of the following bodies:
      • BRE Certification Ltd.
      • ELECSA Limited.
      • NAPIT Certification Ltd.
      • NICEIC Group Limited.
      • British Standards Institution.
  • Gas and central heating:
    • Gas Safe registered.
  • Japanese Knotweed:
    • Property Care Association (PCA) – Invasive Weeds.
  • Tree / Arboriculturalist: 
    • Structural Engineer.
    • Professional Member of the Arboricultural Association.

 

Sub-sale transactions (Resi)

We don’t currently accept applications for sub-sale property transactions.

Tenure

We welcome applications for properties with the following tenure:
  • Freehold/Outright (Scottish) Ownership properties (except flats and maisonettes)
  • Leasehold properties, provided that the lease has at least 80 years unexpired term at outset of mortgage and 50 years unexpired term at expiry of mortgage
Where the property has a flying freehold, this is usually acceptable providing it does not exceed 15% of the property. 

We’re unable to lend on commonhold properties, and any applications for these will be declined.

 

Term

The minimum term we offer is two years or the length of the product selected, whichever is the greater.

The maximum term available is 40 years.

 

The Atom Bank App

Remember

We're a whole bank packed into an app. So to get a mortgage with us, each applicant will need: 

A mortgage code will be issued to each applicant by email / SMS. They will need this to access information about their mortgage in the app.

The app can be downloaded at any time during the application process. We recommend that this happens at the point of DIP,  but it must be downloaded (and terms and conditions of the offer accepted) by all applicants before the conveyancer can request funds for completion. Failure to do so will result in Digital Mortgages being unable to complete the mortgage. 

Transfer of equity (ToE)

We can accept applications where a party is being added or removed from the existing mortgage. All such applications will be subject to normal lending criteria. 

Existing customers may request a ToE on their mortgaged property to add a new party to, or remove an existing party from, the mortgage, after they have had their mortgage for six months. In this instance you'll need to add the relevant background details on the customer's file. Conveyancing fees will be payable by the customer in ToE cases and we will require evidence that affected parties have had independent legal advice. Please view our conveyancing fees leaflets.  

A party being added to a mortgage will be treated as a new mortgage applicant and require full evaluation against our lending criteria and must have been a resident/ occupier in the property for at least six months prior to application. 

A party being removed from the mortgage must have vacated the property prior to completion. 

Unacceptable loan types

We won’t lend against the following types of property transaction:

  • Lifetime mortgages

  • Bridging loans

  • Assignable contracts

  • Back to back transactions

  • Self build

  • Sub-sale transactions

  • BTL

  • Shared Ownership

  • Interest Only/Part and Part

Valuation appeals

Our panel of regional valuers is highly experienced and we're very confident that the valuation they provide will be an accurate reflection of its true market value. 

This means we're unable to accept any appeals against the valuation of the property. 

If your client has an unusual property or you have any other concerns then please contact our dedicated Intermediary Support team or your BDM.

Valuation fees (Resi)

If a physical valuation report is required, we work to the following mortgage valuation fee scale. (Please note that upgrade fees apply to non-fees assisted products only. For fees assisted products a fixed upgrade fee applies to the standard mortgage valuation report fee of £190 for a homebuyers report, or £670 for a building survey):

 Purchase price/ est. value up to   Mortgage valuation report   Homebuyers report   Building survey 
 £100,000
£155 £345 £825
 £150,000 £185 £375 £855
 £200,000 £220 £410 £890
 £250,000  £280  £440 £920
 £300,000 £280 £470 £950
 £350,000 £350 £495 £975
 £400,000 £350 £535 £1015
 £450,000 £425 £570 £1050
 £500,000 £425 £585 £1065
 £550,000 £500 £645 £1125
 £600,000 £500 £645 £1125
 £650,000 £600 £695 £1175
 £700,000 £600 £695 £1175
 £750,000 £600 £775 £1255
 £800,000 £700 £775 £1255
 £850,000 £700 £815 £1295
 £900,000 £700 £815 £1295
£1,000,000 £770 £875 £1355
 Over £1,000,000 Available on request  Available on request  Available on request 

Valuations

Every property used as security requires a valuation.

For some remortgage applications, where the application meets our criteria, we may use an automated valuation model (AVM) to determine the value of the property. However where it is not possible and a physical valuation is needed we'll ask a valuer from our approved closed panel to complete an internal and external inspection of the property.This basic valuation assesses the suitability of the property for mortgage purposes only. While it’s instructed by us and is purely for our use, copies will be sent to both the applicant and the conveyancer.

For customers who’d prefer a more detailed valuation report, we can instruct the valuer to complete one for the customer's behalf, to be paid by the customer (alongside any physical valuation that we might instruct). There are two types the valuer can offer:

  1. Homebuyer Report: This is an internal and external inspection of the property. The report provides an account of the property’s condition and highlights any problems using a traffic lights rating system. It’ll include advice on defects that may affect the value of the property with comments on repairs and ongoing maintenance.

  2. Building Survey: This is an in depth analysis of the property’s condition. It includes advice on defects, repairs and maintenance options, and should be considered essential for larger or older properties, or if the applicant is planning major works.

More information on the types of survey available can be found on the RICS website.

In Scotland, the valuation will usually have been completed before we receive the mortgage application. We will accept a transcript valuation for Scottish applications only, where the original inspection was completed within the last 3 months and where the valuer is on our current valuation panel. In all other cases we don't accept retypes or transcript valuations in any circumstances and a new mortgage valuation will be required. Please see our Price List for Home Report retype fees. 

If the product you select when applying includes a free basic valuation, you can instead opt to use a transcript of an existing Scottish Home Report, however this will not be free and will incur our valuation retype fee (see Price List for details). If you ask us to carry out a free basic mortgage valuation on a property where a Home Report already exists, we’ll always take the most recent valuation figure, even if this is lower than the Home Report value.

Please be aware we are unable to accept:

  • challenges to valuations
  • any requests to add new valuers to panel.