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Residential lending policy

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Applicants

Age

All applicants must be aged 18 or over, and they must be no more than 75 years old at the end of the mortgage term.

For applicant(s) that cannot provide evidence of adequate pension income, the maximum age is their stated anticipated retirement age (no greater than 70 years old) or state retirement age, where no anticipated retirement age has been provided.

Additional criteria apply where the mortgage term extends beyond the applicants' retirement age. Please see Lending into retirement.

Address history

We require three years' UK address history for all applicants. Where an applicant is not able to provide three years' UK address history, non-UK addresses should be recorded and the case reviewed on its own merits.

Number of applicants

We allow up to four applicants on a mortgage application. However, we will only take into account a maximum of two applicants' income when assessing maximum affordability.

Residency status

Applicants must currently be resident in the UK and have permanent leave to remain.

For non-UK nationals, we will require evidence of two years' residency and employment history in the UK. For non EEA-nationals each applicant must have been granted indefinite leave to remain or a right of abode to live and work in the UK

Applicants must not hold any level of diplomatic immunity.

Credit check

We will carry out a credit check on all mortgage applicants as well as additional checks to verify the identity of the applicants. Please refer to our privacy policy for further details.

Acceptable credit history

We will consider applications from applicants with previous CCJs, defaults or arrears, provided they do not exceed the limits in the Credit history matrix.

Credit history matrix

Standard acceptable limits FTB acceptable limits
Repossessions Not acceptable Not acceptable
Bankruptcy Acceptable if discharged for at least 6 years Not acceptable
IVA Acceptable if completed for at least 6 years Not acceptable
CCJs in last 6 months None allowed None allowed
CCJs over 6 months up to 3 years Less than £500 satisfied, less than £250 unsatisfied None allowed
CCJs over 3 years old Considered on an individual basis Considered on an individual basis
Defaults in last 3 years
  • Mortgages
  • Secured loans
  • Unsecured loans
Less than £500 satisfied Considered on an individual basis
Defaults over 3 years
  • Mortgages
  • Secured loans
  • Unsecured loans
Less than £1,500 satisfied or not, may be considered on an individual basis Less than £500 satisfied or not, may be considered on an individual basis
Defaults in last 3 years
  • Communications
  • Mail order supplier
  • Credit cards or store cards
Less than £500 satisfied, less than £250 unsatisfied Considered on an individual basis
Defaults over 3 years old
  • Communications
  • Mail order supplier
  • Credit cards or store cards
Less than £1,500 satisfied or not, may be considered on an individual basis Less than £500 satisfied or not, may be considered on an individual basis
Arrears in last year on unsecured debt 1 month's arrears are allowed 1 month's arrears may be considered on an individual basis
Arrears in last 3 years on secured debt 1 month's arrears are allowed None allowed

Identification and verification

Two forms of identification are required for each applicant - please see Identification and verification - acceptable documents

All documents used for verification must be originals or certified copies of documents that were originally printed at source and posted to the address of the applicant(s). Copies printed from the internet are not acceptable.

If you have examined the original document, you may certify the copy.

If you have not examined the original document, copies of original documents can only be certified by one of the following:

  • Legal professional (solicitor registered in England and Wales, Northern Ireland or Scotland, barrister registered in England and Wales, Northern Ireland or Scotland or notary public registered in any country)
  • Qualified accountant (registered with ICAEW, ICAS, CAI, ACCA, CIPFA or CIMA)
  • Public sector official (serving officer of the Armed Services, serving police officer, teacher in employment)
  • Medical professional (doctor registered with the General Medical Council, dentist registered with the relevant national professional body)
  • Post Office official (person authorised under the Post Office Document Certification Service)
  • Embassy official (an embassy, consulate or high commission officer in the country of issue of the relevant document)
  • Other (local government councillor, Member of Parliament, bank manager, building society manager or minister of religion).

Copies of original documents should have been certified within the last 12 months using the following words: ‘I confirm that I have seen the original document’. The certifier must sign their name and include the following details - full name, profession, business address (where applicable), phone number and date.

The person certifying should be in current employment, but we will also accept certification from a person who has retired (unless the list above specifically indicates that the person should still be serving), provided they still hold the qualification (and are a member of the relevant institute).

The person certifying must not be related to you in any way e.g. spouse, partner, sibling, parent, child or in-law, and they must not be named as a joint account holder/borrower on your mortgage. You cannot certify your own identification.

Identification and verification - acceptable documents

List A - Confirmation of identity (must show name and signature)

  • Full passport (must be current and valid). New customers who are non EEA-nationals must provide a passport with a valid visa that gives indefinite leave to live and work in the UK.
  • Full or provisional UK photocard or paper driving license (must be current and valid)
  • EEA photocard driving licence (must be current and valid)
  • Northern Ireland electoral identity card
  • Shotgun or Firearms certificate
  • EEA member state identity card

List B - Confirmation of address (must show name and address)

  • Full or provisional UK photocard or paper driving license (must be current and valid)
  • House insurance certificate*
  • Bank/building society investment related statement less than three months old and not issued by CBS*
  • Bank/building society mortgage statement less than 3 months old and not issued by CBS*
  • Council/local authority tax bill - less than twelve months old and valid for the current year
  • Utility bills (excluding mobile phone) less than three months old*
  • Northern Ireland electoral identity card

*Documents downloaded from the Internet are not acceptable.

Please note, these lists are not exhaustive. Please contact the Intermediary Development Team for further clarification.

Employment and income

Employment criteria

Please also refer to the Acceptable sources of income and Proof of income sections.

Type of employment Minimum period
Employed
(including Limited Liability Partnerships paid via PAYE)
Continuous permanent employment for the last 12 months.

No more than one 3 month break in the last 12 months is acceptable.

Probation

If the applicant is currently in a probationary period, the application may be considered provided the applicant:

  • has previously been employed in a permanent position for a minimum of 6 months and is now moving to a similar job and
  • is not a first time buyer.
Contracted Personnel
(including zero hour contracts)
Continuous employment in contracting over the last 2 years.

There must be a minimum of 6 months remaining on their existing contract.

If there is less than 6 months remaining, this is only acceptable if the employer confirms in writing that the contract will be renewed for a minimum of a further 6 months or provides a copy of the new contract.

Self Employed - Sole Trader, Partnerships (including Limited Liability Partnerships) and Sub-contractors The applicant must have owned the business for a minimum of 2 years and be able to provide proof of income over a minimum period of 2 years.
Directors with less than 20% share in the Company Directors of limited companies with a shareholding of less than 20% in the company are treated as employed applicants.
Directors with 20% or more share in the Company The Limited Company must have been trading for a minimum of 2 years and the applicant must be able to provide proof of income over a minimum period of 2 years.

To calculate gross annual income, we take the total of the applicant's share of the latest year's net profit of the company after deduction of Corporation Tax (excluding dividends) and their salary.

Proof of income

Type of employment Proof of income
Employed
(including Limited Liability Partnerships paid via PAYE)
  • Latest P60 and last month’s payslip (latest four weeks’ payslips if paid weekly).
    • Without a P60 we require the latest three month period of payslips (latest 12 weeks' payslips if paid weekly).
  • Latest 2 months' bank statements (first time buyers)
  • If the applicant is employed by a family business or a family member we will require 2 months' bank statements. We may ask for further information as well.
  • For annual bonus payments we require 2 years' evidence. For any other bonus payments we require 1 year's evidence. Please provide the relevant payslips showing receipt of bonus payments.
Contracted Personnel
(including zero hour contracts)
  • Copies of contracts demonstrating continuous employment in contracting over the last 2 years.
  • An employer's reference giving full details of the current contract, which we will request.
  • There must be a minimum of 6 months remaining on the existing contract. If there is less than 6 months remaining this is only acceptable if the employer confirms in writing that the contract will be renewed for a minimum of a further 6 months or provides a copy of the new contract.
  • For zero hour contracts, documentary evidence confirming a consistent level of earnings over the last 2 years.
  • Last two months' personal bank statements (first time buyers).
Self Employed - Sole Trader, Partnerships (including Limited Liability Partnerships) and Sub-contractors
  • The latest two years' HMRC Tax Year Calculations plus the Tax Overview documentation (one copy of each piece of documentation is required for each tax year).

We will use the latest year's figures to determine income unless the last two years' figures vary significantly, we may require additional information.

Latest financial year on documentation should be no older than 12 months at the date of application.

The documentation may show a latest financial year up to 18 months old at the date of application when supported with six months' personal bank statements showing income received.

Three months' personal bank statements may be required in other circumstances.

Last two months' personal bank statements (first time buyers).

Directors with less than 20% share in the Company
  • Latest P60 and last month’s payslip (latest four weeks’ payslips if paid weekly).
    • Without a P60 we require the latest three month period of payslips (latest 12 weeks' payslips if paid weekly).
  • Latest 2 months' bank statements (first time buyers)
  • If applicant is employed by a family business or a family member we will require 2 months' bank statements. We may ask for further information as well.
  • Where the applicant would like to include dividend income for the company they work for, we will request a reference from the company account.
  • We take 50% of the average of 2 years' dividends from the company that the applicant has received as their income.
Directors with 20% or more share in the Company
  • Accountant's Certificate covering the most recent two years' accounting period.
    • Latest financial year on documentation should be no older than 12 months at the date of application.
    • The Accountant's Certificate may show a latest financial year up to 15 months old at the date of application when supported with 6 months' personal bank statements.
    • We will request the Certificate directly from the Accountant.
  • 3 months' personal bank statements may be required in other circumstances.
  • Last two months' personal bank statements (first time buyers).
  • We will use the latest year’s figures to determine income unless the last two years' figures vary significantly, we may require additional information.
  • Click here to see full details of our Accountant's certificate.
Pension Income
  • State Retirement Pension (SRP)
  • Private pension
  • Company/Occupational Pension
  • Drawdown on pension fund
  • Widow/Widowers' pension
  • At least one of the following are required where the applicant is already receiving the pension:
    • Latest 2 months' bank statements showing monthly pension payment
    • Latest annual statement from the provider (letter from the Department for Work and Pension for SRP)
    • Latest Pension slip
    • Last two months' personal bank statements (first time buyers).
  • Proof of income for Lending into Retirement:
    • Latest annual statement of pension due from the provider (letter from the Department for Work and Pension for SRP)
    • Documents provided should be no more than 12 months old and the annual income must be clear from the document(s) received.
Investment Income
  • Interest from investments
  • Dividends from shares
  • Income continuing into retirement from business owned (or has a share of) by the applicant
  • Net rental income
  • The latest two years' HMRC Tax Year Calculations plus the Tax Overview documentation (one copy of each piece of documentation is required for each tax year).
  • The documentation may show a latest financial year up to 18 months old at the date of application when supported with six months' personal bank statements.

And/Or

  • Accountant’s Certificate covering the most recent two year accounting period
    • The Accountant’s Certificate may show a latest financial year up to 15 months old at the date of application when supported with six months’ personal bank statements.
    • We will request the Certificate directly from the Accountant.

The latest year’s figures should be used to determine income.

Latest financial year should be no older than 12 months at the date of application.

Three months’ personal bank statements may be required in other circumstances.

Dividend income where the applicant is retired
  • The latest two years' HMRC Tax Year Calculations plus the Tax Overview documentation (one copy of each piece of documentation is required for each tax year).
  • The documentation may show a latest financial year up to 18 months old at the date of application when supported with six months' personal bank statements.

And/Or

  • Accountant’s Certificate covering the most recent two year accounting period
    • The Accountant’s Certificate may show a latest financial year up to 15 months old at the date of application when supported with six months’ personal bank statements.
    • We will request the Certificate directly from the Accountant.

The latest year’s figures should be used to determine income.

Latest financial year should be no older than 12 months at the date of application.

Three months’ personal bank statements may be required in other circumstances.

Acceptable sources of income

We will generally accept the following as sources of income.

  • Employed income including
    • 100% of basic salary
    • 100% of guaranteed income:
      • overtime/bonuses (excluding annual bonuses)/shift allowance
    • 50% of regular income:
      • overtime/bonuses/shift allowance
    • For annual bonuses we use 50% of the average of the latest 2 years' annual bonus or 50% of the most recent year's figure if lower
  • Car allowance is acceptable provided it forms an integral part of the remuneration package but must not include any allowance to refund expenses paid out by the applicant, e.g. mileage allowance.
  • We will also use 100% of annual non-pensionable allowances forming an integral part of the remuneration package e.g. London weighting allowance.
  • Self employed income
  • State pension
  • Private pension
  • Company/Occupational pension
  • Widow/Widowers' pension
  • Rental income (the net figure submitted to HMRC for taxation purposes)
  • Drawdown on pension fund
  • Income from a company the applicant owns that will continue to provide an income into retirement
  • Investment income

The incomes of a maximum of two applicants will be considered.

Income from multiple sources

We will consider more than one source of income per applicant, provided they meet our acceptable income criteria and can be evidenced in line with our standard proof of income criteria.

Unacceptable sources of income

The following are examples of unacceptable sources of income. Please note this list is not exhaustive. If you are unsure, please call us.

  • Expenses (travel payments, meal allowances etc)
  • Child/working family tax credits
  • Disability allowances
  • All other state benefits unless otherwise stated
  • Maintenance, including court ordered
  • Bursaries and other educational subsidies
  • Foster income
  • Income derived from lodgers
  • Income from temporary employment
  • Income derived from Employee Benefit Trusts (EBTs) or umbrella companies
  • Income derived from a foreign currency for applications for new borrowing, porting with a further advance and further advances.

Maternity/paternity leave

Where an applicant is on maternity/paternity leave, we will use the income that they expect to receive upon returning to work when calculating affordability. We will request an employment reference directly from the employer to confirm this. The applicant's plans to repay the monthly mortgage payment during maternity/paternity leave must be in place at the point of application.

Approved accountancy bodies

Accountant's certificates should be prepared by an Associate or Fellow of an approved accountancy body:

  • Institute of Chartered Accountants (ICA)
  • Association of Chartered Certified Accountants (ACCA)
  • Chartered Institute of Management Accountants (CIMA)
  • Institute of Financial Accountants (IFA)
  • Association of Authorised Public Accountants (APA)
  • Chartered Institute of Public Finance & Accountancy (CIPFA)
  • Chartered Institute of Taxation (CIOT)
  • Association of International Accountants (AIA)
  • Association of Accounting Technicians (AAT)

Affordability

It is important that all applicants can afford to repay their mortgage before we enter into a regulated mortgage contract with them, and we take a range of factors into account to determine how much an applicant can borrow.

Our affordability assessment aims to ensure that, after the mortgage payment has been made, there is sufficient net income remaining to cover financial commitments and additional outgoings, including general household and lifestyle costs. We will also consider the impact of possible future interest rate increases on the long term affordability of the mortgage.

The actual loan amount will be subject to: a full credit score, affordability assessment, review of current credit commitments and our current lending policy.

Our affordability calculator provides you with both the maximum loan amount and maximum monthly payments, based on your client's individual circumstances. This can be found in the calculators section of our website.

Lending into retirement

Applicant(s) who are currently employed or self-employed (i.e. not yet retired) and the mortgage will continue when the applicant(s) retire(s) and will have:

  • 50% or more of the mortgage term in retirement: the lower of current income or anticipated retirement income (both must be net of any ongoing commitments) will be used to calculate the maximum monthly payment and maximum loan amount.
    or,
  • 5 years or more of the mortgage term in retirement: the case will be assessed by an underwriter to ensure that the mortgage is affordable in retirement.

The lower of current income or anticipated retirement income (both must be net of any ongoing commitments) will be used to calculate the maximum monthly payment and maximum loan amount.

If proof of acceptable income past retirement age cannot be provided then the loan term will be restricted to the retirement age (maximum age 70). Please refer to applicant age.

If you would like to discuss individual cases in more detail, please call our Intermediary Development Team on 0800 121 7788 (selecting option 2).

Property

Property location

Properties must be situated in England, Wales, Scotland or the Isle of Skye.

Please note: We accept transcribed valuations for residential purchases in Scotland. Transcriptions must be carried out by a valuer on our approved panel and must be no more than three months old at the date of application.

Tenure

Freehold

Freehold (also known as Feuhold, heritable or absolute ownership) tenure is acceptable for houses, bungalows and cottages in England, Wales and Scotland.

Freehold (including the previous Feuhold and Heritable Security Tenures) is the only acceptable tenure for properties in Scotland.

Leasehold

Leasehold tenure is acceptable for houses, bungalows and cottages in England and Wales.

Leasehold is the only acceptable tenure for flats and maisonettes in England and Wales.

Leasehold tenure is acceptable provided:

  • no sub-leases have been created
  • all of the properties within the block have a leasehold title
  • the unexpired leasehold term must be at least 70 years at completion

Construction

Properties must be built of brick or stone with a tile or slate roof. For flats, we will also accept a flat mineral felt roof. The mortgage valuation will be used to confirm the suitability of the property.

Construction of brickwork

Single skin brickwork is only acceptable for garages and porches provided they are single storey, or a small proportion of the habitable area subject to valuer’s guidance.

Steel framed properties

We will consider steel framed properties provided that they were built on or after 1 January 1990. The cladding must be predominantly (67%) either brick or stone at all levels. Outer cladding specifically excluded includes large concrete panels, timber, plastic, metal sheeting, and tiles. However, areas of less than 33% of the total external wall area formed in these materials may be considered on their own merits provided that the remainder of the walls are constructed of an acceptable material.

Timber framed properties

Timber framed properties built after 1990 can have up to a maximum of four storeys considered.

  • Houses, Cottages and Bungalows

    Timber framed properties built after 1945. Cladding must be predominantly (67%) of either brick or stone at all levels. Outer cladding specifically excluded includes large concrete panels, timber, plastic, metal sheeting, and tiles. However areas of less than 33% of the total external wall area formed in these materials can be considered on their own merits if the remainder of the walls are constructed of an acceptable material.

  • Flats and Maisonettes

    Timber framed construction built pre 1995 up to two storeys maximum and post 1995 up to four storeys maximum. The outer skin must be predominantly (67%) either brick, concrete block or stone block at all levels.

Please note, the information above outlines our general construction criteria. If you have a specific query, please contact our Intermediary Development Team on 0800 121 7788 (selecting option 2).

Solar power panels

Applications where solar power panels are installed on the property being purchased, or remortgaged, are acceptable, subject to the valuer confirming the property is suitable security, and where the solar panels have a lease the acting conveyancer confirms that the lease is acceptable.

Flats

Flats above shops are restricted to a maximum LTV of 75% and dependent on the nature of the business, we may not be able to lend at all.

We will not consider a mortgage application for ex-local authority flats or ex-housing association flats:

  • Where there are more than five storeys.
  • Where the flats are accessed via an external deck or 'balcony access'.

The loan to value on ex-council or housing association flats or maisonettes is restricted to 70%.

We also will not consider the following:

  • Lending on freehold flats or maisonettes and studio flats/apartments.
  • Flats in a block of more than ten storeys.
  • Flats on the fifth storey or above in a block without lift access.

Maximum LTV, criteria, and definition for new build flats, can be found within new build properties (less than or equal to three years old, or first occupation)

New build or converted properties (less than or equal to 3 years old, or first occupation)

Apartments, flats and coach houses

The maximum loan to value for a new build or converted apartment, flat or coach house is 75% LTV.

We define new build as properties that have been built within three years of the mortgage application or are properties to be occupied for the first time. This includes flat conversions where the number of flats in the development exceeds ten.

Houses

The maximum loan to value for a new build house is 85%.

We define new build as properties that have been built within three years of the mortgage application or are properties to be occupied for the first time.

Any new build properties must hold either:

  • a Professional Consultant's Certificate (PCC) which is valid for the first six years, or
  • an acceptable builder's guarantee which is valid for the first ten years

Second hand properties under ten years old must have been built with the benefit of an acceptable builder's guarantee scheme subject to the following exception:

Where the property was built or converted within the past six years, we will accept the application if it was built with the benefit of a Professional Consultant's Certificate (PCC) where cover was valid for the first six years.

For both new and converted properties the legal representative must confirm:

  • building regulations' approval has been obtained
  • planning approval has been obtained and in the case of listed buildings, the relevant consents for changes to listed buildings have been obtained and that the works have been carried out in compliance with those consents

Builder's incentives

The vendor of any new property is required to disclose the full value of any incentive in connection with the purchase of the property.

Where we are notified of any incentives, the value of the incentives will be deducted from the purchase price to ascertain the net purchase price. The maximum loan and mortgage offer will be based on the net purchase price.

Purchase applications

For purchase applications, the vendor must have owned the property for a minimum of six months.

Properties close to commercial outlets

Our ability to lend may be restricted for properties that are in close proximity or influential distance of commercial outlets. We will take advice from our valuers when assessing the property to be mortgaged.

Self-builds and self-build conversions

Applications are not considered where the property offered for security is a self-build property or a self-build conversion, where the construction or conversion of the property is not fully completed at the time of application.

Property exposure limits

Applications where it is identified that the customer owns more than 10% of the development, in which the proposed property will be located, will not be accepted.

Where there are ten or less properties on the development or estate, if the applicant already owns one or more properties in the development or estate, we will not consider lending under these circumstances.

Japanese knotweed

Properties affected by Japanese knotweed, RICS categories 1 and 2, are acceptable subject to a satisfactory valuation report.

Category 1 – Japanese knotweed was not seen on the property, but it could be seen on a neighbouring property or land where it was more than seven metres away from the boundary.

Category 2 – Japanese knotweed was not seen on this property, but it was seen on a neighbouring property or land within seven metres of the boundary but more than seven metres away from habitable spaces, a conservatory and/or a garage.

Properties affected by Japanese knotweed that do not meet the above criteria are unacceptable.

Loan criteria

Acceptable loan purposes

We will consider applications for the following loan purposes providing the application meets all our lending criteria:

  • to purchase residential properties for owner-occupation
  • to remortgage residential properties for owner-occupation
  • to improve, repair or maintain residential properties that are owner-occupied
  • to raise capital on residential unencumbered (mortgage-free) properties that are or will be owner-occupied
  • to raise capital (including debt consolidation), subject to restricted purposes
  • to purchase the freehold title of a leasehold property which is already in mortgage to us
  • to purchase the equity of another party to the mortgage
  • to purchase additional land

Unacceptable loan purposes

We will not accept applications for the following:

  • property purchases where vacant possession would not be achieved upon completion (including situations where the property is purchased by a
    close relativeMore infoToolTip on focus and the present occupier is allowed to remain in the property)
  • shared equity applications (including the Homebuy scheme and the Key Worker scheme)
  • shared ownership application
  • use of the loan for bridging finance
  • business investments, payment of taxes, replenishment of savings and investment in timeshares

Purchasing from limited companies

We will not consider lending to anyone who wishes to purchase a property in their own name from a limited company in which they have a major interest.

Source of deposit

For property purchases applicants must provide a deposit from their own resources.

The following exceptions apply:

  • family sale purchases at a discounted price where a loan for the full purchase price (e.g. no deposit) may be considered
  • a gifted deposit from close relativesMore infoToolTip on focus. The deposit must be a genuine unconditional gift and must not be secured by a charge or in any other way

Multiple Residential mortgages

Where the applicant is purchasing another property, all existing Residential mortgages must be redeemed or the applicant(s) released from their covenants before completion of the new loan.

Maximum repayment term

Maximum repayment term requirements apply to all loan types. The maximum repayment term is 35 years.

The maximum term may be restricted by the maximum age restrictions.

Repayment types

We will only accept applications for new lending, (including further advances) on a capital and interest repayment basis.

For porting and transfer of equity applications, if any part of the current mortgage is on an interest-only basis then evidence of a repayment plan must be provided.

Loan to value criteria

These are the maximum LTV limits we apply. Certain products may have restricted loan to value criteria in which case the lower LTV will be applied.

Loan amount - value Purchases - LTV limit
Remortgages - LTV limit
Further advances -
LTV limit
    Like for like
(no additional lending)
Additional lending to current mortgage balance  
Over £750,000 and up to £1m 75% 75% 75%** 75%^
Over £400,000 and up to £750,000 80% 80% 75%** 80%^
Over £250,000 and up to £400,000 90% 90% 75%** 90%^
Up to £250,000 95% 95% 75%** 95%^

**If the remortgaged property is unencumbered or there is less than £5,000 outstanding on the current mortgage the maximum LTV is 50%.

^If the property is unencumbered or there is less than £5,000 outstanding on the current mortgage the maximum LTV is 50%.

First time buyer products have a maximum loan amount of £250,000.

Offer validity

Offers of advance for purchases (including Transfers of Equity) are valid for a period of 6 months from the date of application.

Offers of advance for remortgages and further advances are valid for a period of four months from the date of application.

Please note: Where there is a simultaneous request for a further advance and a transfer of equity, the Transfer of Equity offer will be valid for 6 months and the further advance offer will be valid for four months.

Mortgage offers will not be extended, completion of the mortgage must take place by the mortgage offer expiry date.

Remortgaging criteria

For applications to remortgage properties for owner-occupation, the applicant (or in the case of joint mortgages, all applicants) must reside in the property at the date of application.

Acceptable capital raising purposes

We accept the following loan purposes (subject to loan amount and LTV limits):

  • To improve, repair or maintain residential properties that are owner-occupied
  • Debt consolidation
  • To purchase the equity of another party to the mortgage
  • To extend the leasehold title of the property in mortgage to us
  • To purchase additional land

First time buyer products

First time buyer products have a maximum loan amount of £250,000.

We define a first time buyer as an applicant that has never owned a property. For first time buyers applying for products from our Standard Residential and Offset product ranges, normal residential policy applies. In addition to normal lending policy, a FTB will also need to provide the additional requirements set out in policy where applicable (two months bank statements).

For applicants applying for products in our Coventry Building Society first time buyer product range, the extra rules in this section apply.

Specific first time buyer product criteria

For applicants applying for products in our Coventry Building Society first time buyer product range, the following extra rules in this section apply.

All applicants must be first time buyers.

Applicants must have been in continuous employment for at least one year prior to application (in the case of a joint application, both applicants must have been in continuous employment for at least one year, where both applicants' income is being used to calculate affordability).

Applicants must never have been declared bankrupt or had an IVA registered against their name.

The maximum loan is £250,000. The maximum loan to value is dependent on the specific first time buyer product.

Step-Up

The Step-Up facility is no longer available to new customers. However, existing Step-Up customers can still apply for porting, transfers of equity and further advances.

Portability criteria

Portability means that your client can move (or 'port') their existing mortgage scheme to purchase a new property.

Our porting policy varies according to the customer's type of mortgage scheme. Please contact the Intermediary Development Team on 0800 121 7788 (selecting option 2) for any porting queries.

Accountant's certificate for directors with 20% or more shares

Figures must be final, not draft or projected.

We require the following information:

  • Company name
  • Nature of business
  • Date business started
  • Year ending*
  • Turnover
  • Net profit and the Applicant's gross share of the net profit**
  • Salary defined as the applicant's gross salary excluding any benefit in kind (e.g. car benefit) or dividends
  • Spouse's salary

We will also ask the following questions:

  • If profits/drawings/salary/dividends are not level or rising an explanation will need to be provided, especially where drawings/salary/dividends exceed net profit
  • In your opinion, is the amount of drawings/salary supported by the on-going performance of the business?
  • Please confirm that cash flow projections are sufficient to support the forecast growth of the business.
  • In your opinion, are the level of drawings/dividends sustainable to allow the business to grow and continue to be profitable?
  • Are there any significant exceptional one-off items of income or expenditure, not expected to recur, reported within the net profit of the periods reported? Details of any such items will need to be provided
  • If applicable, please provide a breakdown or the source of the applicant's additional income and specify any other factors which may affect the future profitability
*Where the accountant's certificate shows the latest financial year over 12 months and up to 15 months old at the date of application, 6 months personal bank statements showing income received will be required to support the application.
**Net profit figures must be stated prior to dividends, after taking into account the applicant’s salary and after the deduction of corporation tax.