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Large loan product and LTV limit updates, interest only and other lending policy changes
Large loan LTV limits
On Tuesday 9 April, we’re increasing our LTV limits for large loans.
Please note our product range LTV limits also apply.
To support the above changes, we’re increasing the maximum loan size on selected residential fixed rate products, including new build. We’re also introducing new large loan products into the new business range.
Product changes:
- Increasing the maximum loan size from £1.5m to £3m on residential fixed products up to 75% LTV.
- Increasing the maximum loan size from £1m to £2m on residential fixed products up to 85% LTV.
- Withdrawing all 60%, 70% and 75% LTV 2 year and 5 year fixed large loan products with a £2,499 fee for loans above £1.5m and up to £5m.
- Launching new 60% LTV 2 year and 5 year fixed large loan products with a £1,999 fee for loans above £3m and up to £5m.
- No changes to residential trackers.
Further information:
Full details of our new business range can be found in Rate Bulletin (Issue 10). You’ll find this on our Latest mortgage rates page from Tuesday 9 April.
Interest only
On Tuesday 9 April, we’re making changes to our interest only lending policy.
- The maximum loan term is increasing to 40 years from 25 years for new and existing customers who are increasing the interest only amount.
- Where the repayment vehicle is sale of property, the minimum equity needed is increasing to £300,000 from £250,000. This applies to new and existing customers who are increasing the interest only amount.
- Where any part of the mortgage is on an interest only basis, the maximum LTV for the overall lending is 85%. Where there’s a combined gross income of £200,000 or more, any lending over 75% LTV must be on a capital and interest basis. For applicants with a combined gross income of less than £200,000, any lending over 50% LTV must be on a capital and interest basis.
Other residential policy changes
On Tuesday 9 April, we’re updating our affordability calculator to take into account the 2024/2025 tax year changes.
In addition, the Child Benefit threshold is increasing to £60,000 from £50,000. Child Benefit shouldn’t be included where the applicant receiving the benefit or their partner’s total gross income is above £60,000.
Pipeline rules
All full mortgage applications (FMAs) submitted by 10pm on Monday 8 April won’t be affected by these changes.
Any FMAs submitted from 6am on Tuesday 9 April will be assessed using our new lending policy.
If a material change is made to an existing application from 6am on Tuesday 9 April, the case will be reassessed using our new lending policy.