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Nat West Buy to let Lending criteria

Natwest Buy to let Lending criteria

Natwest - Buy to let Lending criteria

Notes: The following information may contain errors. We have not verified this information with the lender.

Ask your broker to confirm any aspects that are important to you. The main features of this mortgage will be confirmed in the Key facts Illustration. Please ask your broker for a Key facts Illustration

 

Mortgage Product

Advances
Upto 2,000,000 75% LTV

Notes
Mortgage is Portable
If you buy a new property while an early repayment charge (ERC) is payable on one or more of the products which make up this mortgage, you may port your existing mortgage product(s) to your new property subject to the following terms;

Your new application must meet our lending criteria current at the time you move. We will carry out credit checks on you, and will require a valuation of the new property, and will decline to port if you do not meet our criteria in force at that time. This may mean that we decline to lend at all on the new property, or may allow you to port less than the amount you have applied for.

You may not port to a flexible mortgage type such as Offset or One Account mortgages.
The customer named in the existing mortgage and the ported mortgage must be the same (this means that in the case of a joint mortgage all of you must also be named on the new mortgage and you cannot port separately), and the mortgage product must be the same, in terms of interest rate and product end date.
The mortgage must be ported to a new property that you are purchasing; you cannot port to property you already own.

We will refund your ERC if you meet the above terms, provided that you complete your new mortgage within 3 months of the date of redemption of the current mortgage. (e.g. if this mortgage redeems on 25th January, you new mortgage must complete by or on 24th April. If 24th April falls on a non-business day, the new mortgage must complete by or on the last business day before that date).
If you port the full balance on which an ERC is payable, we will make a full refund of the ERC. If you port less than the full balance outstanding we will refund only the ERC payable on the amount transferred.

Where no ERC is payable, you may apply to us for a new mortgage when moving house. Any new application will be subject to our lending criteria current at the time you move, and will require credit checks and a valuation of the new property.
*PLEASE NOTE** FIRST TIME BUYERS (WITHOUT A RESIDENTIAL MORTGAGE) WISHING TO PURCHASE A BUY-TO-LET PROPERTY WILL BE SUBJECT TO OUR STANDARD RESIDENTIAL CRITERIA.

A Buy-to-let mortgage can be used for:
The purchase of new investment properties.
The remortgage of existing portfolios.
Equity release from unencumbered investment properties.

Let-to-buy proposals.
Extra borrowing for permanent improvements to the property or the purchase of another buy-to-let property.

Eligibility


The applicant(s) must be 18 or over.
Maximum mortgage term is to applicant's retirement age (maximum age 70).
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.

Applicant must be UK National, EU National or have indefinite leave to remain in the UK.
We will not consider multiple tenancies, Homes of Multiple Occupancy, bedsits, DSS tenants or 'Related Person' tenancies
Assured Shorthold (England & Wales)/Short Assured (Scotland) tenancy agreements required.

Business partnerships and limited companies are excluded - although NatWest Business Banking may be able to assist.

The maximum number of Buy-to-let mortgages your client can have is four.
We cannot accept applications from professional landlords, property developers or those applicants earning >30% of their income from property related activities.

Repayment Types
Buy-to-Let mortgages are available on both Capital and Interest and Interest only methods of repayment. We can accept sale of the property as a repayment vehicle.
Loan parameters

The maximum LTV, before fees, is 75% (65% for new build properties). The value is calculated on the purchase price (if applicable) or the current market valuation, whichever is lower.

The minimum loan is 25,000.
The minimum property purchase price/valuation is 50,000.

Rental cover - up to four loans
We use a rental cover percentage to work out how much your client can borrow.
All rental cover percentages are based on an interest rate of 125% at 5.5%.

Employment
One applicant must have a minimum income of 25,000 & we will require standard income verification documentation for all applications.
Applicants wishing to borrow a total of 1 million or more for Buy to Let (BTL) purposes will require to have a minimum annual income of 50,000 p.a. (it is not sufficient for applicants joint income to be 50k).

Properties
Must be habitable and complete before drawdown.
Must be a private residence and not for running a business.
Any form of commercial or business property. Or proposal where stage payment funding is required (e.g. self-builds or property renovation proposals or buying 'off plans') is not acceptable.

Valuations
A standard Buy-to-let mortgage valuation by a panel surveyor instructed by us (RBS Group) is always required for each application.

As well as providing the usual report information, including the valuation figure, the report will advise us of:
The expected monthly income.
Whether the property is in a suitable condition to let.
Whether the property is in an area where there is a steady demand for rented accommodation of this type.

Four times loan to income and a maximum term of 30 years applies to all mortgage loans of more than 500,000

Loan parameters
The maximum LTV, before fees, is 75% (65% for new build properties). The value is calculated on the purchase price (if applicable) or the current market valuation, whichever is lower.
The minimum loan is 25,000.
The minimum property purchase price/valuation is 50,000.
The total aggregate borrowing cannot exceed 2,000,000, up to a maximum of 4 BTL's.

You can make overpayments on this mortgage.
You can overpay a maximum of 10% of your outstanding mortgage balance in each 12 month period commencing on completion of your mortgage and continuing from each anniversary of that date until the end date of this rate, without incurring an Early Repayment Charge. If your mortgage is made up of more than one part you can overpay up to a maximum of 10% of the outstanding balance of each part.

An Early Repayment Charge will be incurred on any overpayment that exceeds the annual 10% limit. Please refer to Section 10 for information on Early Repayment Charges that would be incurred if any overpayment exceeds the annual 10% limit.
You benefit immediately from overpaying directly to your mortgage. If you make an overpayment or lump sum payment then the amount you owe, and the amount of interest you pay, is reduced immediately.

Regular Overpayments
You can arrange to set up, discontinue or alter a regular overpayment in writing or by telephone at any time after completion of the loan. Your request must be received by us at least 14 days prior to your next Payment Day in order to be processed in time for that payment, otherwise the change will take effect from the following Payment Day.

Regular overpayment amounts will be collected with the Monthly Payment and will not be varied automatically as a result of any change to the Interest Rate. The agreed overpayment will continue to be collected with the revised Monthly Payment after any such change.

Buy to Let : Accepted, Max properties 4
Let to Buy : Accepted
Capital Rest Period : Daily

Repayment Types
Repayment Yes
Endowment 75% LTV
PEP 75% LTV
Pension 75% LTV
Interest only (no RV) 75% LTV
With Profits 75% LTV
Unit Linked 75% LTV
ISA 75% LTV
Split Repayment 75% LTV

Fees


Arrangement : varies Can be Added
Booking : None

Early Repayment Charges
During fixed or discount period only

Higher Lending
None

Valuation
Basic:
upto 100,000 - 123
upto 250,000 - 173
upto 500,000 - 277
upto 700,000 - 459
upto 850,000 - 552
upto 1,000,000 - 627
upto 1,500,000 - 1185
upto 2,500,000 - 1480
upto 3,000,000 - 2070
upto 10,000,000 - 6210

Homebuyers:
upto 100,000 - 258
upto 250,000 - 367
upto 500,000 - 511
upto 700,000 - 702
upto 850,000 - 814
upto 1,000,000 - 927

Min Valuation 50000
A Withdrawal Fee of 150 will be payable once a full Mortgage Offer has been issued if the customer fails to complete. The fee applies to all mortgage customers who are purchasing a property, remortgaging their current property or porting their existing mortgage to a new property.


Arrangement Fee - 0.00 Payable upfront. This fee is payable on application and is refundable until completion.

Valuation Admin Fee - 75.00 Payable upfront. This is payable with the valuation fee.
Lender Conveyancing Fee - 117.50 Payable on completion. The Lender Conveyancing Fee is the cost of legal work carried out for us as the lender and not the overall solicitor's fees for the whole transaction. The figure shown here is an estimate based on the average fee charged. Please check the actual charges with your chosen solicitor as they may vary depending on the property.
Remittance Fee - 30.00 Payable on completion. This is an administration fee when the loan proceeds are issued to the solicitor and is deducted from the amount sent.

Acceptable Property Types


Freehold Flat Yes
Purpose Built Flat Yes
Converted Flat Yes
Flat Over Shop Refer
Maisonette Refer
Studio Flat Yes
Flying Freehold Yes
Thatched Refer
Timber Framed Yes
Concrete Refer
Agricultural Tie Refer
Flat Over 4 Storeys Refer
Listed Building Refer

Not Accepted
New Build acceptable. Properties must be habitable and complete before drawdown.

Must be a private residence and not for running a business.

Any form of commercial or business property. Or proposal where stage payment funding is required (e.g. self-builds or property renovation proposals or buying 'off plans') is not acceptable.

A standard Buy-to-let mortgage valuation by a panel surveyor instructed by us (RBS Group) is always required for each application. As well as providing the usual report information, including the valuation figure, the report will advise us of the expected monthly income, whether the property is in a suitable condition to let, whether the property is in an area where there is a steady demand for rented accommodation of this type.


Accepted Locations : England, Scotland, Wales

Requirements


Bank Statements No
At Least 3 Months Pay Slips No
P60 No
Proof Of Residency Yes
Life Policy To Be Assigned Refer
Previous Lender References No

Insurance
Buildings Conditional

Conditions On Loan
Min Loan 25,000
Max Loan 2,000,000
Max Portfolio of BTL Loans 2,000,000
Min Age 18 years
Max Age 70 years
Min Term 3 years
Max Term 35 years
Please refer to the Packaging section of intermediary.natwest.com for full details of supporting documents required.

To see how much your client may be able to borrow, please view the lenders mortgage affordability calculator also available at intermediary.natwest.com

Once you have completed your application, you will receive a scoring decision, which will be either an 'Accept', 'Refer' or 'Decline' message. Any policy warnings will also be displayed. As part of the scoring process, we will attempt to electronically verify and validate the identity of your client. If successful you will receive a message to confirm that we will not require any further proof of identity for your client. Where we have been unable to verify their identity, you will be asked to send us certified copies of their identity documents you will already have on your file. Either way, you will know at the point of sale what will be required.

Building insurance to cover the full cost of rebuilding your property.
Foreign Citizens Refer
Ex-Patriates Not Accepted

Income Multipliers
Rental Income must be 125% of the monthly mortgage payments when calculated using a rate of 5.5%.

Min months in current position 1
Min months in continuous service 6
Min no. of years accounts 2
Average years taken to calculate income 2
Will consider declining profit No

Outgoings
Rental cover - up to 4 loans:
We use a rental cover percentage to work out how much your client can borrow.
All rental cover percentages are based on an interest rate of 125% at 5.5%

Employment:
One applicant must have a minimum income of 25,000 & we will require standard income verification documentation for all applications.
Applicants wishing to borrow a total of 1 million or more for Buy to Let (BTL) purposes will require to have a minimum annual income of 50,000 p.a. (it is not sufficient for applicants joint income to be 50k).
Income multiple of 4.99 x 1st or 4.99 joint income also required.

Rental Income must be 125% of the monthly mortgage payments when calculated using a rate of 5.5%.
Mininum Income - Single 25000
Hire Purchase Taken into account
Personal Loans Taken into account
Overdraft Refer to lender
Credit/Store Cards Taken into account
Child Maintenance Taken into account
Child Education NOT Taken into account
Extra Income:-
Other Income - Guaranteed No
Other Income - Regular Add 100% to income before multiply
Other Income - Irregular No
Investment Income No
Mortgage Subsidy Add 100% to income before multiply
Large Town Allowance Add 100% to income before multiply
Maintenance Payments Add 100% to income before multiply
Non Contributory Pension No
Car Allowance Add 100% to income before multiply


Remortgage



Capital Raising Acceptable
Home Improvements 75%
Debt Consolidation Not accepted
School Fees Not accepted
Holidays/Cars Not accepted
Buy Other Property Not accepted
Business Purposes Not accepted
Divorce Settlement Not accepted
Unencumbered 75%



Adverse Credit
CCJs : Refer to lender
Defaults : Refer to lender
Arrears : Refer to lender
Bankrupt : Not Acceptable
Current IVA : Not Acceptable
Repossession : Not Acceptable

Refer to lender
- The Lender will consider customers with previous or existing adverse credit in a flexible manner and every case will be assessed on its individual merits, along with the customer's ability to keep up repayments on the mortgage, taking into account his/her existing liabilities.
- The Lender will consider cases of financial difficulty and mortgage arrears sympathetically.
- The Lender will follow the general principles of the Council of Mortgage Lenders' Statement of Practice on Handling Arrears and Possessions, including :
a) with your co-operation, developing a plan with you for dealing with your financial difficulties and clearing the arrears, consistent with both your interests and those of the Lender.
b) possession of your property will be sought only as a last resort when attempts to reach alternative arrangements with you have been unsuccessful.