Useful information about our mortgages
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
From time to time we may offer mortgage products that include incentives – these are special offers that make some products more attractive than others. Not all incentives are available to all customers and not all incentives are available all the time.
Some incentives require you to have another product with us, for example to have your main current account. If so, we’ll say this in the section of your Mortgage Illustration headed ‘Flexible features'.
The interest rate for products with incentives may sometimes be slightly higher than for products without incentives. So you need to consider whether the incentive available at the start of the mortgage is more important to you than the slightly lower interest rate you may get during the product rate period without the incentive.
If we offer free purchase conveyancing as an incentive, we will choose the conveyancer for you. If you prefer to use your own conveyancer, you should not choose this incentive because we will not pay your conveyancer's legal costs.
|What's included in free purchase conveyancing||What's not included in free purchase conveyancing|
|The basic legal fee for the purchase.||Fees for additional work outside the scope of a standard property purchase, for example, preparing a declaration of trust to set out the different interests of the property’s co-owners.|
|The fee for the legal work done on our behalf.||Administration for Stamp Duty Land Tax/Land and Buildings Transaction Tax (properties in Scotland) or the tax itself.|
|Any leasehold supplements (but not any landlord’s (lessor’s) registration fee that may apply), for example, a fee to the landlord for registering the change in lease ownership.||Any money paid out, such as search fees.|
If we offer free remortgage conveyancing as an incentive, we will choose the conveyancer to deal with the legal work. If you prefer to use your own conveyancer, you should not choose this incentive because we will not pay your conveyancer’s legal costs.
|What's included in free remortgage conveyancing||What's not included in free remortgage conveyancing|
|The fee for the legal work done on our behalf.||Any legal advice or additional services you want the conveyancer to provide. (If you are in Northern Ireland, you cannot ask our conveyancer for advice or additional services – you must instruct a different conveyancer.)|
If we offer to contribute to one of your household bills, for example your council tax, when your mortgage starts, you will need to complete a form and return it with your first bill. This must be addressed to you (or at least one of you if more than one person is named on the loan). You must ask us for the money within six months of the mortgage starting. So make sure you do this in good time, and then you won’t lose out.
When we receive your form, we will send the money direct to your service provider and then write and let you know when we have done this. Bear in mind that you remain responsible for paying your bills.
When you move into your new home, you must contact your service provider to discuss how you want to pay your bills.
If we offer a cashback as an incentive, your Illustration and offer letter will set out how much it will be, how we will send it to you and when we will pay it.
Sometimes, we offer a cashback as a reward for having another relationship with us, for example for taking out or having a current account or savings account. If so, this will also be shown in your Illustration and offer letter.
If we offer a cashback of interest charges, your Illustration and offer letter will say so. Cashback could be for one month or more.
To calculate the cashback we will use the total amount you are borrowing, and multiply by the highest interest rate we will charge you at the start of your mortgage. We calculate one month’s interest based on 31 days. The example below shows how we do this. If our offer is for more than one month’s interest, we calculate 31 days for each month. So, for example, we use 62 days to calculate two months’ interest cashback.
There may be a maximum to the amount of interest cashback we will pay.
We will write to let you know how much the cashback will be. This will be sent to the bank account from which you have chosen to pay your monthly mortgage payment.
|Example: For a loan amount of £80,000|
|£45,000 with an Interest rate of product 1 – 5.35%
£35,000 with an Interest rate of product 2 – 6.09%
80,000 x 6.09% x 31 (days) / 365 (days)
It is sometimes possible to take a product rate with you to a new mortgage. We sometimes call this 'porting'. Your Illustration and offer letter will say if any of your product rates can be taken to a new mortgage.
Porting means taking a product rate and the early repayment charge with you to another mortgage with the same lender. If the lender has more than one brand, it means keeping your mortgage with the same brand.
You may be able to take the product and early repayment charge to the new mortgage for the amount that you currently owe on that product. If you are borrowing more, you will need to have a new product for the extra amount you borrow.
If you are borrowing less than the amount you owe on the product and the offer you have for your old mortgage says there is an early repayment charge, then you will have to pay an early repayment charge on the difference.
You can only take your product rate to a new loan if your offer letter says so.
The product rate can only be taken to a new loan while the product rate period(s) applies. You cannot take your product once you are paying interest at the lender variable rate that applies to that part of your mortgage.
We will decide whether to offer you a new mortgage based on our lending policies at the time you apply. If we do not offer you a new mortgage, you cannot port your product. Also, if you repay your existing mortgage, you will still have to pay early repayment charges.
If you intend to sell your current property but you can't take out a new loan and repay your existing loan at the same time, you can ask permission to have two loans with us for a short time.
We will agree to this if we think you can afford to pay the monthly payments on both loans. You may take your existing product rate to the new loan. But you will have to transfer your existing loan to the lender variable rate that applies to it until the sale is complete and you have fully repaid the loan.
This is a concession and it may not always be available, so please ask about it when you apply for your new mortgage.
If you sell your property but are not yet ready to buy another, you will need to repay your existing mortgage. This means you will have to pay any early repayment charges that apply. However, if you apply for a new mortgage with us within three months of repaying your existing mortgage, you can take your old product rate with you to your new mortgage.
Once your new mortgage has started, you can apply to us for a refund of the early repayment charge.
This is a concession and it may not always be available, so please ask about it before you sell your property.
We offer different types of mortgage products with different interest rates. With some of these there may be a charge if you repay all or part of your loan within a certain period of time; we call these early repayment charges. Your Illustration and offer letter give details of any early repayment charges that apply to you.
We charge them because when setting up the funds to provide loans to customers, we expect them to keep the money for the time agreed at the outset. There is a cost to us if they repay some or all of the loan sooner. The charge compensates us for this cost.
We will apply an early repayment charge if, before the end of the early repayment charge period set out in your Illustration and offer letter, you repay the loan on which an early repayment charge applies.
We’ll base the charge on the amount you owe when you repay the loan, but it will never be more than the maximum charge we set out.
If you repay part of the loan on which an early repayment charge applies, we will charge you a proportion of the early repayment charge due.
|Amount you owe||£50,000|
|Percentage early repayment charge payable||5%|
|Total early repayment charge payable||£2,500|
|Amount you repay early||£25,000|
|Total early repayment charge payable||£1,250|
Yes. Currently, as a concession, in each calendar year you can make regular or lump-sum overpayments of up to 10% of the amount owed at 1st January without having to pay an early repayment charge. (This is for any product where an early repayment charge applies.)
If the total amount you overpay during the year exceeds 10%, we will only charge you an early repayment charge on the proportion you overpay above 10%.
|Amount owed on 1st Jan||£50,000|
|Total amount of regular/lump-sum overpayments made between 1st Jan and 31st Dec||£10,500|
|Less the amount of regular/lump-sum overpayments where early repayment charges do not apply (10% of £50,000)||£5,000|
|Total amount of regular/lump-sum overpayments where early repayment charge applied||£5,500|
|Total early repayment charge payable (£5,500 × 5%)||£275|
If you then repay the loan in full within six months of making a regular or lump-sum overpayment, we will require you to pay the full early repayment charge, including the portion we previously did not charge.
Remember, we can change or withdraw our 10% early repayment charge concession , so if you decide you want to make regular or lump-sum overpayments, it’s always a good idea to contact us and check if the policy has changed. We will give at least 3 months notice before withdrawing or reducing the concession.
If you are moving home and can take the product rate with the early repayment charge with you to a new mortgage, you will not have to pay the early repayment charge. This is sometimes known as porting.
There may be times when you want to pay more or less than your monthly payments.
Regular overpayments are amounts you pay that are extra to your monthly mortgage payments. They reduce the amount you owe on your mortgage. If interest on your mortgage is charged using our Daily Interest method they also reduce the amount of interest we charge because we calculate interest on the reduced balance from the day we receive the overpayment.
Overpayments will not automatically reduce your mortgage term because whenever we recalculate your monthly payment, your overpayments go towards reducing your new payment.
You may want to make regular overpayments to pay off your loan sooner, but don’t want to ask us whether you can formally change the term of your mortgage agreement. If so, you will need to remember to review the amount of the monthly payment whenever we recalculate it, and increase the amount of your regular overpayment.
You can make regular overpayments by increasing the amount of your monthly payment. You can do this by asking us to increase the monthly direct debit we collect from your bank account. Find out more about increasing your direct debit.
You may have to pay an early repayment charge if you are making an overpayment during an early repayment charge period. Your Illustration and offer letter will tell you if early repayment charges apply and how long for.
After the first year of your mortgage your annual statement will tell you this.
If we have an early repayment charge concession when you make your overpayment, you will pay an early repayment charge on only the part of the overpayment that exceeds our concessionary limit.
Bear in mind that if you make any lump-sum overpayments during the year, these will count towards your 10% early repayment charge concession.
Lump-sum overpayments are when you pay off part of your loan using a one-off payment.
There are many ways you can make an overpayment - find out more.
Making a lump-sum overpayment will reduce the amount of interest you will pay us over the life of the mortgage because you are reducing the amount you owe.
If interest on your mortgage is charged using our Daily Interest method, we will stop charging you interest on the amount of the lump-sum overpayment on the day we receive the money. If interest on your mortgage is charged using the Annual Interest method, we will stop charging interest on the amount of the overpayment at the beginning of the year following the payment being made. If you don’t know which method is applied to your mortgage, or if you would like to change to the Daily Interest method, please call us on 0345 603 1637Call telephone number 0345 603 1637.
You need to tell us if you want us to use the money to reduce the monthly payments by keeping the mortgage term the same.
If you would like to reduce the remaining mortgage term you will need to speak one of our qualified mortgage advisers, who will discuss your needs and circumstances and recommend the most suitable mortgage, and term for you.
If you have an interest-only mortgage, you can ask us to reduce the mortgage term but only if you can show us that your repayment plan(s) to repay the loan at the end of the term will provide enough money to do so sooner.
You may have to pay an early repayment charge if you are making a lump-sum overpayment during an early repayment charge period. Your Illustration and offer letter will tell you if early repayment charges apply and how long for. After the first year of your mortgage your annual statement will tell you this.
If we have an early repayment charge concession when you make your lump-sum overpayment, you will pay an early repayment charge on only the part of the lump sum that exceeds our concessionary limit.
Remember: if you make regular overpayments during the year, these will count towards any early repayment charge concession.
Yes. You can tell us which part of your loan you want us to repay with your lump-sum.
For example, you may want us to reduce the part we charge at the highest interest rate, or the part that does not have an early repayment charge on it.
If you don’t tell us which part of your loan you want to repay, we will reduce each part of your loan in the same proportions as we apply your full monthly payments.
|The total monthly payment is £600 and is split into two parts:
Part 1 is for £360 (60% of the monthly payment)
Part 2 is for £240 (40% of the monthly payment)
You make a lump-sum overpayment of £10,000
Part 1 would receive £6,000 (60% of the lump-sum)
Part 2 would receive £4,000 (40% of the lump-sum)
An underpayment is where you pay less than your monthly payment. You are not allowed to make underpayments unless you have already made overpayments.
Whenever we recalculate your monthly mortgage payment, we use any overpayments you have made to reduce what you owe. Once we have done this, you will need to build up new overpayments before you can underpay again.
Yes. If you want to make underpayments, you should call us on 0345 603 1637Call us on 0345 603 1637 to discuss your options.
If you have previously made overpayments, we can tell you how much is available for you to use to underpay. We can then change your direct debit for the time you want to underpay.
Need to take a break from all or part of your mortgage payment?
A payment holiday is when you take a break from paying part or all of your monthly payment but you have not made any earlier overpayments against which you can underpay.
They are available for a variety of reasons, usually to assist with a temporary change to your circumstances like a change in employment, maternity leave or unexpected or unforeseen vehicle or household expenditure.
To apply for a payment holiday you must contact us. Payment holidays increase the amount you owe. For this reason, we have a payment holiday policy and we will assess your application to see if you can meet all our policy requirements. We do not guarantee that we will agree to a payment holiday.
Check our current policy to see if you might qualify for a payment holiday.
We will consider applications to transfer the mortgage onto a letting basis but if we agree, you may have to transfer onto another product from a range that is specifically for this purpose.
You must not let your property to tenants without our permission.
You cannot usually let your property if you purchased your home under the Help to Buy scheme.
You must have had your mortgage with us for at least six months before you can apply, unless you are a member of the armed forces.
If you are registered for our Online Banking service you can complete the online application form.
You can find the form under Your Mortgage – More Actions – Account Services – Request Consent to Lease. Online Banking is 24 hours a day, 7 days a week.
If you are not registered for our Online Banking Service we will ask you to complete our Consent to Lease application form.
If we give our permission, we will tell you on what basis we will allow you to let your property.
We don't allow multiple tenancies. This means where each tenant signs a separate agreement and/or has separate facilities e.g. multiple kitchens.
The maximum number of tenants on one tenancy is five and all tenants must be party to one agreement. Tenancies must be in writing for a fixed term of up to 12 months in England and Wales, nine months in Northern Ireland and six months in Scotland. After this, tenancies may be renewed for another fixed term.
If you let your property or we reasonably believe you have, without our permission:
We may also backdate the extra interest or additional payments to when you originally let your property, or to when we believe you did so.
If you decide to move back in to the property you'll need to let us know by calling the Consent to Lease team on 0845 600 9026Call telephone number 0845 600 9026. You'll be asked to send us evidence that you are back living in the property. Full details of acceptable evidence will be provided by the Consent to Lease team.
Our mortgage basics guide covers what you will need to think about when looking for a home and applying for a mortgage.
Our charges and standard costs.