Lending Criteria | Mortgage Brokers | NatWest International

Acceptable income types
For us to include income it must be evidenced. Please contact us if you wish us to include benefits/allowances when considering affordability or if you are uncertain of our requirements.

In order to assess affordability we must be able to establish income net of any taxes and any other deductions at source payable by the customer.

The acceptance of an income source is at our discretion.

Adding fees to the loan
We can consider adding Arrangement fees to a Buy to Live mortgage within our Loan to Value parameters. See Product Guide for more information.

Please ensure that your customer understands the cost impact of adding an Arrangement fee to a mortgage over its lifetime.

We cannot add Arrangement fees to a Buy to Let mortgage.

Age requirements
Applicants must be at least 18 years old at the time of application. The maximum age at the end of term is 70, this may be reduced depending on Anticipated Retirement date.

Affordability
When assessing affordability we:

• use a customers net disposal income and rental income taking into consideration voids, tax and agents costs
• will use actual income received including guaranteed allowances i.e. housing, school fees, cost of living allowance etc. where income is tax free
• include cash, bonus and commission income 
• will assess affordability based on Net Disposable Income and rental income (*)
• will need a full understanding of committed costs i.e. existing mortgage costs, HP, rent, school fees, private pension etc.
• will discount  income that is not earned in Pounds Sterling by 10% to reflect currency fluctuation

(*)  for foreign nationals with no right to reside in the UK we require a minimum 100% rental coverage assessed at our sensitised rate of interest.

See Acceptable income types for more information.

Adverse credit
When possible we will consult credit reference agencies. We will not usually accept an application if there are any  CCJ’s or Default’s relating to a mortgage, loan, overdraft or credit card.  

We may show flexibility if the debt is connected to a utility bill, mobile phone, catalogue account or store card.  This will be on a case by case basis and the customers overall financial profile. In all cases full details of the debt and reason behind the court action will be required along with confirmation it has been settled.

We will not lend to applicants who are Credit Impaired, undischarged Bankrupts or who have been declared Bankrupt in the past 6 six years.

A credit impaired customer is a person who:

• within the last two years has owed overdue payments in an amount equivalent to three months payments, on a mortgage, other loan or credit card (whether secured or unsecured), except where the amount overdue reached that level because of late payment caused by errors by a Bank or other third party; or 
• has been the subject of one or more county court judgments, with a total value greater than £500, within the last six years; or 
• has been subject to an individual voluntary arrangement or Bankruptcy order which was in force at any time within the last six years.

Back to back

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

Bank statements
Internet Bank statements may be accepted as proof of income providing they are in a recognisable format (e.g. PDF file) and display the account holders names

'Screenshots' are not acceptable.

Bonus
See `Acceptable income types`.

Builder's Incentives
The maximum amount of acceptable incentive is 15% of the purchase price of the property. If the builder’s incentives are greater than 15% applications must be declined.

Lending is based on the lower of the purchase price of the property or the property valuation. The purchase price will not be adjusted for incentives, unless the total amount of incentives exceeds 5% of the purchase price. Incentives greater than 5% will be deducted and lending based on the lower of the reduced purchase price or the property valuation.

Buy to Let: Affordability
See `Affordability` and `Acceptable income types`.

Buy to Let: Eligibility criteria

• The property must be in England, Scotland or Wales 
• The property must be a residential property owned by the applicant(s) and not for their own use at any time
• Customers must be either a UK Expat, Inpat or a Foreign National
• Customers must be resident in a country on our approved country list
• We will not consider multiple tenancies, Homes of Multiple Occupancy, Bedsits, property with a floor space smaller than 30sqm, Student lets, DSS tenants or 'Related Person' tenancies
• Assured Shorthold (England & Wales) tenancy agreement required/a Private Residential Tenancy under the Private Housing (Tenancies) (Scotland) Act 2016 (Scotland)
• Business partnerships and limited companies are not accepted
• The maximum number of rented properties an applicant can have is ten, including the property being mortgaged
• We cannot accept applications for regulated Buy to Let mortgages (where the occupants are immediate family members of the mortgage holder) but could depending upon the circumstances consider Buy to Live
• Applicants must be at least 18 years old at the time of application
• The maximum age at the end of term is 70
• We will consider First Time Buyers

Buy to Let: Purpose
A Buy to Let mortgage can be used for:

• Purchasing new investment properties
• Remortgaging existing properties and portfolios with or without a Further Advance
• Further Advance from unencumbered investment properties for property related purposes
• Purchase of first investment property

Buy to Live : Affordability
See `Affordability` and `Acceptable income types`.

Buy to Live: Eligibility criteria

• The property must be in England, Scotland or Wales
• The property must be a residential property owned by the applicant(s)
• Customers must be either a UK Expat, Inpat or a Foreign National
• Customers must be resident in a country on our approved country list
• Business partnerships and limited companies are not accepted
• Applicants must be at least 18 years old at the time of application
• The maximum age at the end of term is 70

See `Product Criteria` for more information.

Buy to Live: Purpose
A Buy to Live mortgage can be used for:

• Purchasing a new residence including first time buyers
• Remortgaging of an existing residential mortgage
• Further Advance

Capital Raising - Acceptable purposes
See `Further Advances`.

Certification of documents
See our Broker Application checklist for our packaging requirements

Our account opening requirements may differ from those that you are used too because we are located outside the UK and subject to different regulations. It’s important that you follow our instructions carefully to avoid the need to obtain new documents and delay issuing an offer letter if we can help your customer.

Please review certification requirements for account opening purposes.

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

• We may require evidence for childcare costs, however if there is a difference between what is on the evidence provided as part of the application and the declared costs this will be challenged/discussed to ensure the correct figure is used for the customer.
• As part of the affordability discussion you will need to clarify with the customer whether it is certain or likely that childcare costs will change over the next 5 years. The highest figure should be used over the 5 year period.
• In some circumstances childcare costs may be unknown, for example if the customer is currently pregnant, on maternity leave or if childcare arrangements are yet to be made. Customers can suggest likely future costs. 

There are a number of situations where childcare cost will not included, these include:

• Where customers are using free childcare e.g. a relative to look after their child.
• Where the childcare costs are stopping within the next 6 months.

Commercial Property
We do not provide mortgages against commercial property.

Please contact us if you are looking to provide a Buy to Live or Buy to Let mortgage above a commercial premises.

Concentrations (number of properties in a development)
A limit will be set for how many properties we will lend on in each New Build development (including developments that involve the conversion of usage from office to residential). This does not apply to single properties that have been converted into flats. Limits will vary according to each individual development and must not exceed 25%.

Consent to let
We will not consider Consent to let in respect of new applications.

Construction types
See `Property Types`.

Consumer buy-to-let
Consumer buy-to-let is a type of regulated business introduced by the EU Mortgage Credit Directive 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’, we will not be able to help as we do not offer this type of lending. 

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 consider consent-to-let for existing NatWest International mortgage customers looking to let out a property on a residential mortgage.

Contractors
We will consider income from Contracting subject to a minimum 12 month track record with a contract for a further 12 months being in place. Shorter contract terms may be considered please contact us.

See `Acceptable income types`.

Credit scoring
We do not use Credit Scoring.

All applications are assessed against information provided by the customer in their application form, their supporting financial information and our knowledge of the International customers.

Your Business Development Manager will assess each application before submitting to underwriters for approval or decline.

Dependants
This includes children under 18, those in higher education and financially dependant elderly relatives. Where the customer pays maintenance for a child, they should not be listed as a dependant.

DHSS Tenants
We do not provide mortgages that will be let to DHSS Tenants.

Discounted purchase
Transactions at undervalue/gifted deposits: the purchase of a property from a family member 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 is subject to the solicitor providing a clear report on title or appropriate indemnity insurance. The maximum mortgage can be based on the valuation, not the actual purchase price. Provision of monies over and above the actual purchase price can be agreed at underwriter discretion subject to standard maximum Loan to Values. 

See `Gifted deposits` and `Product Criteria`.

Diplomatic immunity
We cannot lend to anybody who has or may have diplomatic immunity under the Geneva Convention or inter-government treaties.

See `Politically Exposed Persons`.

Early repayment charges
An early repayment charge will be incurred on lump sum reductions and any overpayment. Please refer to the early repayment section of the Mortgage Illustration or our rate sheet for further information.

Employment status
We will accept applications from Employees, Contractors and Self Employed

See `Acceptable Income Types`. 

Family purchase
See `Discounted purchase`.

Fees and charges

• Product fee: this is the fee payable for the Bank to arrange a mortgage and can be added to A buy to live loan only
• Legal fees: these are paid to the solicitor for legal work done on behalf of the customer (i.e. transfer ownership of the property to them) and work undertaken on behalf of the Bank (e.g. registering the mortgage deed)
• Valuation fee: this covers the cost of the valuation. 
• Drawdown 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 product
• Adding fees to the loan: Arrangement and Drawdown  fees are the only fees that can be added to the loan
• Future fees: once your customer’s mortgage is set up, they may need to pay one-off fees for other services which are detailed in our Tariff of Charges. We will send your customer a copy of our Tariff of Charges with our Offer of Mortgage

For more information pleased read our Tariff of Charges.

Freehold flats and Flying freehold properties
We will consider Freehold flats and Flying Freehold properties where it is possible to enforce positive covenants. Before considering lending against this type of property we rely on the valuer’s recommendations and the solicitor’s confirmation that the property title is good and marketable.

Foreign currency income
We could help customers where all or part of their income is obtained in a currency other than Pounds Sterling. 

Under the EU Mortgage Credit Directive regulated mortgages that will be paid fully or partly from a currency other than Pounds Sterling are referred to as Foreign Currency Mortgages.

When we provide a regulated Foreign Currency Mortgage the customer must tell us which currency they will use to pay their mortgage. If they earn several currencies they must nominate one. 

We will write to regulated Foreign Currency Mortgage customers if their currency deviates adversely by 20% or more from the exchange rate at the point that the mortgage was completed.

Foreign Nationals
We provide mortgages to Foreign nationals provide they live in a country on our approved list.

For more details please read our approved list.

Further Advances
We can consider Further Advances for:

• permanent home improvements (including the extension of the current lease)
• equity raising to purchase another property (residential or buy to let)
• buying out an existing title holder / partner

Gifted deposit: Builder's incentive
See `Builder's incentives`.

Gifted deposit: Family gift

• We accept deposits (and gifts) from Family Members and treat them as if they were the applicant’s own deposit. Any monthly cost relating to a formal loan agreement must be included in the customer’s expenditure statement and will be taken into the affordability calculation.
• Where a gift is not subject to repayment we will require confirmation of this.

Gifted deposit: Third party
Gifts from third parties (not sellers/vendors) are an acceptable source of an applicant's deposit, but only where there is no repayment required. We will need to understand that rational for a third party gift. 

Gifted deposit: Vendor
Deposits provided by a private vendor by way of a second charge or unsecured loan are not acceptable. 

Vendor gifted deposits, where no repayment is required, will 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 will be treated as an incentive and be deducted from the gross purchase price to obtain the net purchase price. We will base the maximum mortgage on the net purchase price or valuation whichever is the lower, with the customer providing their own deposit.

Guarantors
We do not support mortgages backed by a guarantor.

Help to Buy 
We do not consider applications for Help to Buy.

Houses of Multiple Occupancy (HMO`s)
We do not provide mortgages secured against Houses of Multiple Occupancy (HMO`s).

High Rise properties
We do not have a limit on the maximum amount of stories.

Interest only
Interest Only mortgages are available for Buy to Let customers.

See `Product Guide`.

Interest rates
You will find more details of our interest rates on our Mortgage Products webpage.

Japanese knotweed
The valuer will assess each case on a case by case basis. Please contact us.

Large acreage
We may consider properties with a plot size in excess of 4 hectares/10 acres. Please contact us to discuss.

Leasehold
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 please contact us for further details.

In all instances, assessment will be made based on the valuer's comments. 

Loan to value
See 'Product Guide'.

Lending into retirement
Where a customer is looking to take their residential mortgage past their intended retirement age and their income will be relied upon to service the mortgage, we will require details of their income into retirement. The level of information required will depend on how far away from retirement the applicant is at the time of application. Please contact us to discuss.

If the customer is more than 10 years away from their intended retirement age we require documentary evidence of the existence of a pension or retirement provision (this can be a pension contribution on a pay slip, pension statement, etc.). There is no requirement to prove the pension will yield an income sufficient to repay the mortgage. 

If the customer is less than 10 years away from their intended retirement age you must provide documentary evidence of their post retirement income in the form of one of the following (this list is not exhaustive):

• Annual pension statement from the employer or pension provider(s) showing the age (or date) when the pension becomes payable and the amount.
• Department of Work and Pensions forecast of Graduated, SERPs or State Pension with details as above.
• Statement/letters from previous employers showing the values of preserved pensions, the date they become payable and the basis of indexation/revaluation.
• Tax return, accounts or Bank statements showing receipt of income from investments or net rental income (after costs including mortgage payments).

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

Letting to a family member (regulated Buy to Let)
We do not currently support regulated Buy to Let but we may be able to consider a Buy to Live mortgage.

Limited Company / Companies
We provide mortgages to personal customers only.

Live / Work properties
If the customer intends to run a business from the property, please contact us to discuss

Maintenance
See `Acceptable income types`.

Maternity leave
We require evidence of the customer’s income prior to their maternity leave. We would also require evidence of the customers return to work date, their salary at return to work and may require details of how the customer will cover expenditure during maternity leave period. Please contact us for further information.

New build
A new build is defined as any property built, first occupied in its current state or significantly modernised, refurbished or altered within the last 2 years.

See `Builder's Incentives` and `Offer of Loan - validity` and `Product Guide`. 

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
• Premier Guarantee *
• Build Zone & Buildcare
• Building Lifeplans Limited (BLP, Allianz Guarantee )
• Ward Cole (12 year structural warranty)
• LABC (New Home Warranty – not self build)
• Castle 10 ( Checkmate)
• Build Assure (New Home Structural Defects Insurance)
• Global Home Warranties
• CRL - New Build 10 Year Structural Defects Insurance policy for Residential Property
• The Q Policy
• Protek New Home Warranty
• Aedis Group Homeproof Structural Warranties
• Advantage Warranties
• International Construction Warranties
• Ark Residential New Build Latent Defects Insurance

* Premier Guarantee Warranties for flats - the amount of cover must be at least equal to the reinstatement figure on the Valuation report.

Offer of loan (validity)
Standard mortgage offers are valid for 90 days.

Our Credit Approvals are valid for six months from the date the application form is signed by the applicants

Overseas property
We provide mortgages against property that is located in England, Wales or Scotland.

Please contact us if you are seeking a mortgage against a property that is located in the Isle of Man, Jersey or Guernsey.

Overtime
See `Acceptable Income Types`. 

Politically Exposed Persons
We cannot help customers that are considered to be Politically Exposed.

Please contact us for further information or if you are unsure.

Portfolio landlord
We define a portfolio landlord as a customer who has four or more properties owned solely, jointly or in aggregate across all applicants that meet the following criteria:

• Rented properties, whether mortgaged or unencumbered
• Residential properties with either consent-to-let or permission-to-let agreements from the current lender
• Properties must be in the UK (England, Scotland or Wales)
• Excludes properties held in a limited company and overseas

For customers with four or more rented properties, additional information will be asked for in relation to landlords’ experience, use of letting agents and future plans to expand or reduce their portfolio.

Porting

We permit Porting.

Our requirements are earlier detail in our Offer of Loan or can be confirmed by contacting us.

Probation
See `Acceptable Income Types`.

Procurement Fees
The basis on which we pay procurement fees is stated in our Introducer Agreement/Terms of Business.

Product fee
We charge an `Arrangement Fee`.

Product guide
Please read our lending criteria guide.

Product maturities
The balance available to switch must meet a product minimum of £10,000. 

Our existing customer team will assist customers with Product maturities.

Property types - acceptable 

Subject to the valuer confirming saleability and suitability for mortgage purposes, we can lend against the following:

• No-fines concrete construction.
• Steel framed houses (exceptions apply, please check).
• Flats over or immediately alongside business premises.
• 100% timber construction.
• Properties containing high alumina cement.
• Freehold flats - where it is possible to enforce positive covenants, the maximum LTV is restricted to 90%. Before considering lending against this type of property, we rely on the valuer’s recommendations and the solicitor’s confirmation that the property title is good and marketable.
• Agricultural restrictions - the maximum LTV will usually be 50% but each case will be assessed on its own merits.
• Properties used for business - we can only lend if the property is primarily for residential use and the work area of the property is 20% of the total property area or less.
• Leasehold properties - there must be at least 30 years left on the lease at the end of the term (we may consider less for properties in central London).
• Flats (on any level) in multi-story type properties are usually acceptable, subject to exceptions e.g. where the valuer identifies issues with the building and/or locality which are likely to adversely affect resale.

Property types - unacceptable

• Properties with a floor area of less than 30m2.
• Properties listed under the Housing Defects Act (valuers will advise us if the property falls within the Act).
• Steel clad houses.
• System built concrete construction.
• Prefabricated/(pre)reinforced/poured or shuttered concrete construction.
• Easi-form construction (except by Laing from 1945 onwards).
• Mundic block property.
• Properties built on contaminated land.
• Timber-framed property with cavity wall insulation unless installed during construction.
• Multi-ownership properties.
• Shared ownership properties.
• Working farms, smallholdings and crofts.

Regular bonuses
See `Acceptable income types`. 

Repayment methods
The following methods are acceptable: 

• Buy to Let: Capital and Interest and Interest Only
• Buy to Live: Capital and Interest

See `Product Details`.

Restrictions on Resale
We will not lend on a property where there are restrictions on resale. 

Scottish transcripts and home reports
Transcripts are only acceptable for Scottish residential property purchases and only where they are a re-type of the Home Report valuation. The home report valuation must have been carried out by a valuer on our panel and be less than three months old. We must instruct the transcript request. Transcripts instructed by any other party are not acceptable. 

Transcripts will not be requested where the property has an estimated value of more than £1m.  For buy-to-let purchases, a standard valuation will instead be instructed.

Seafarers
We will consider applications from Seafares provided they reside in one our acceptable countries when not at sea.

See `Acceptable Income Types`. 

Self-build
We do not currently support self-build mortgages.

Self-employed
See `Acceptable Income Types`. 

Shared ownership
We will lend if the customer will own 100% of the property upon completion of the mortgage.

Source of deposit
We may ask for proof of deposit on all mortgage applications. 

See `Gifted deposit`.

Sole trader/partnerships
See `Acceptable income Type`.

Special Purpose Vehicles (SPV’s) - Lending to non personal customers
We provide mortgages to personal customers only. 

Students
We do not provide Buy to Let mortgages that will be let to students.

Tax
We do not provide tax advice. 

A customer should be advised to obtain their own professional tax advice before entering into a mortgage.

See `Withholding Tax`.

Tenure
Acceptable property tenure: Feudhold, Freehold, Leasehold and Sub-Leasehold.

Term
Please read our Lending Criteria guide.

Trusts
We do not provide mortgages to trusts.

Unacceptable income types
See our Acceptable Income Types for our extensive list of acceptable incomes.

Valuations
We will instruct our Panel valuers after the mortgage has been approved. The Panel Valuer will arrange to collect payment for the valuation.

Withholding Tax
Your customer could have potential tax implications as mortgage interest repayments may attract Withholding Tax as Royal Bank of Scotland International is a Jersey registered company. 

A Tax Adviser will be able to confirm whether withholding tax is applicable based on your customer’s circumstances. 

Your customer should take Tax Advice from an independent Tax Adviser on any potential implications of Withholding Tax. 

The Bank cannot provide tax advice. 

Your customer will be obliged to pay any applicable Withholding Tax costs in addition to their regular mortgage payments. 

Once it has been determined if Withholding Tax is relevant we can upon request apply to HM Revenues & Customs on your customers behalf for UK Withholding Tax relief.

Yacht Crew
See `Seafarers`.