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Mortgage lending criteria

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Personal details

  • Min age

    18 – for Residential; 21 for BTL.

  • Max age

    80 years old at the end of term, standard affordability assessment. Borrowers who are over 80 years old at the end of the term will be considered on an individual basis.

  • Lending into retirement

    If the applicant is already retired or retiring during the mortgage term, the following is required:

    • Detailed assessment of how the applicant will repay the mortgage in retirement e.g. from a company/ private pension.
    • Documentary evidence to demonstrate the retirement income.
  • Address history

    All applicants must have been in the UK for the last 3 years.

  • Ex-pat

    Not accepted.

  • First Time Buyer

    Defined as an applicant who has never owned a residential property in the UK. On joint applications, this applies to all applicants.

  • Guarantor

    Not accepted, can consider joint borrower/sole proprietor for both residential and BTL applications.

  • Joint Borrower/Sole Proprietor

    Accepted, only where the additional borrower(s) is a close family relative. Independent Legal Advice required for all parties. On a residential mortgage the Joint Borrower cannot reside in the property. Joint Borrower/Sole Proprietor is not available for capital raising unless for the benefit of all parties.

  • Islamic Mortgages

    Not accepted.

  • Number of Applicants

    Maximum of four. For residential mortgages, 3rd and 4th applicants are accepted if they are close family relatives.

    For BTL mortgages, a maximum of 4 applicants (unrelated applicants accepted).

  • Visa

    All applicants must have permanent rights to reside in the UK. Tier 2 Visas considered (Maximum LTV 75%), minimum income £75,000, Capital and Interest loans only. Proof of Sponsorship required.

  • 2nd Mortgage - Aggregated Debt Affordability

    Affordability calculation needs to cover both mortgage balances.

Employment/income details

  • Time in Employment/Probation Period

    3 months in current employment required, 12 months in continuous employment. Probationary period acceptable subject to conditions, dependent on career history.

  • Bonus/Commission/Overtime

    We use 100% of cash bonus/commission/overtime averaged over the last 2 years. This can be used for affordability assessment except where:
    a) Bonus exceeds 100% of gross basic salary. If this applies, then use bonus amount equal to 100% of
    gross basic salary or 50% of average bonus, whichever is higher.
    b) Downward variance of 20% or more over the 2 year period. If this applies, then 50% of the average of
    the last 2 years is to be used.
    The last 2 years P60’s will need to be provided.

  • Shift Allowance

    Accepted.

  • Car Allowance

    Accepted.

  • Rental Allowance

    Not accepted.

  • Large Town Allowance

    Accepted.

  • Second Job

    Accepted – 100% if 12 month track record and sustainable.

  • Bursary Income

    Not accepted.

  • Foster Income

    Not accepted.

  • Private Pension

    Accepted.

  • Investment Income

    Accepted.

  • Rental Income

    Accepted, amount calculated as amount received as profit from land and property after removing any dis-allowable expenses - such as mortgage interest. To be evidenced via most recent SA100 paired with the Tax year Overview (submitted tax return with Inland Revenue Mark). Lodgers income not accepted.

  • Maintenance Income Court Order

    Accepted, if guaranteed for the life of mortgage.

  • Maintenance Income No Court Order

    Not accepted.

  • Trust Income

    Accepted, must be guaranteed for term of mortgage, refer for additional requirements.

  • Benefits Child Tax Credit

    Not accepted.

  • Benefits Work Tax Credit

    Not accepted.

  • Benefits Child Benefit

    Not accepted.

  • Benefits DLA/PIP For Self

    Accepted if granted for life.

  • Benefits DLA/PIP for dependant

    Not accepted.

  • State Pension

    Accepted.

  • Self-Employed

    Classed as self-employed if own more than 25% of business this includes PAYE Directors that hold more than 25%.

  • Sole trader

    Accepted. Minimum of 3 years Self-Assessment returns supported by Tax Year Overviews downloaded from the HMRC website.
    Where the return is submitted by an accountant, the calculation or computation and tax year overview, will need to be supported by a covering letter on headed paper confirming the attached figures have been submitted to HMRC.

  • Accountant Qualifications

    Main accountants’ qualifications accepted.

    Main qualifications accepted:

    - Institute of Chartered Accountants England & Wales

    - Institute of Chartered Accountants Scotland

    - Chartered Institute of Management Accountants

    - Association of Chartered Certified Accountants

    - Chartered Institute of Public Finance and Accountancy

  • Company Accounts

    2 full sets of finalised annual accounts submitted to Companies House.

  • Profit figure used

    Affordability is usually assessed using average of the last 2 years directors remuneration and operating profit before taxation. Refer to self-employed and Directors of a Ltd Company for further details.

  • Partnerships

    Accepted. Treated as self-employed.

  • Directors of Ltd Company

    2 Years full company accounts. Directors remuneration plus average dividend for last 2 years is used where company accounts evidence sustainability. Profit before taxation plus directors remuneration can be considered if 100% of shareholders are on the mortgage. 

    Minimum of 3 years Self-Assessment returns supported by Tax Year Overviews downloaded from the HMRC website.

    Where the return is submitted by an accountant, the calculation or computation and tax year overview, will need to be supported by a covering letter on headed paper confirming the attached figures have been submitted to HMRC.

  • Contracts

    Accepted. Minimum 3 month current contract and history of contracts of at least 12 months required. Contracts must have a start and an end date. If current contract is nearing its end we may require evidence that it has been renewed.
    Contractors must be self-employed.
    Income calculated as a daily rate over 46 weeks.

  • Professionals

    This product is for fully qualified, registered and practicing Solicitors, Barristers, Medical Doctors, Accountants, Actuaries, Vets and Dentists who want to buy their first home or move property to upsize

    • We can offer enhanced income multiples (normally we offer 4.49 times the customer’s income but for the professional mortgage we can offer 5.5 times their income - subject to affordability)
    • The customer must be over 21 years of age
    • Applicants must have qualified in the last ten years and be registered with the appropriate UK professional body. They must also work in the field related to their profession
    • We will consider professional applications for up to two applicants only, at least one applicant must meet our professional criteria. Applications may be considered where a ‘non-professional’ has the highest income and subject to full case review

    Registered bodies
    We can only accept applications for the Professional Mortgage if the customer is registered with the following:
    Barristers
    - The Bar Council
    Actuaries
    - The Institute and Faculty of Actuaries (IFoA)
    Accountants
    - Institute of Chartered Accountants England & Wales
    - Institute of Chartered Accountants Scotland
    - Chartered Institute of Management Accountants
    - Association of Chartered Certified Accountants
    - Chartered Institute of Public Finance and Accountancy
    Medical Doctors
    - General Medical Council
    Solicitors
    - Law Society of Northern Ireland
    - Law Society of England & Wales
    - Law Society of Scotland
    Dentists
    - General Dental Council (GDC)
    Vets
    - Royal College of Veterinary Surgeons (RCVS)

    Note: Professionals employed in a role without their qualification as their job title will be considered on an individual basis. E.g. a fully qualified accountant working as a senior finance manager would be considered for a Professional Mortgage. Being self-employed is no barrier to having an application accepted - in fact, many self-employed professionals find the flexibility of this mortgage ideally suited to their needs.

  • Umbrella companies

    Accepted - classed as contractors. Refer for assessment.

  • Supply Teachers

    Only if long term track record – average of last three years’ earnings.

  • Temporary/Zero Hour Contracts

    Not accepted.

  • Maternity Leave

    If returning within 3 months – Latest payslips showing SMP, plus pre maternity payslip and letter from employer confirming return date and that salary will be the same. If going back under different terms, employment reference required. If return to work is greater than 3 months away – refer.

  • Forces Concession

    Not accepted.

  • Foreign Currency

    Income or Assets generated or held in a currency other than (£) sterling are not accepted for the purpose of Affordability or Repayment Strategy.

Existing mortgage/debts details

  • BTLs in Background

    Need to demonstrate that any BTLs are self-financing (the rental exceeds the mortgage payment), 3 months bank statements required to show rental and mortgage payments. If more than 4 with mortgages see portfolio landlords below.

  • Let To Buy (BTL Mortgage)

    Accepted, completion will need to be simultaneous with onward residential purchase.

  • Let To Buy (Existing Resi Mortgage)

    Where a client applies for a residential purchase mortgage but will be letting their old residence out (rather than selling), the old main residence mortgage will be ignored if an ARLA letter shows rent will cover the mortgage repayments once the client moves out. If a new mortgage is being taken out on the property, a KFI/Offer will need to be provided and the rental need to cover the new mortgage payment. Evidence of consent to let maybe requested when existing mortgage is being retained on residential terms.

  • Consent to Let

    Evidence of consent to let maybe requested when existing mortgage is being retained on residential.

  • Porting

    Accepted, refer for details.

  • Non Simultaneous Sale & Completion

    Treated as running 2 houses and affordability calculation will take into account both mortgage (if applicable).

  • Other Debts

    Any debts remaining on completion are included in expenditure as part of the affordability calculation, including credit card balances at 3% are included in the affordability calculation. Any debts with less than 3 months to run can be ignored.

  • Childcare and School Fees

    Taken as commitment and will need to be evidenced. 

Property details/purpose

  • Location of Lending

    Mainland England, Wales and Scotland.

    For Scotland we will not lend in the following postcodes:
    Aberdeenshire (AB)
    Western Isles (HS)
    Highlands (IV, KW & ZE)

    A Standard Mortgage Valuation will be required in all cases.

  • Minimum property value/ purchase price

    £75,000 for both residential and BTL properties.

  • Agricultural Ties

    Not accepted.

  • Annexe/Granny Flat

    Accepted, if used by own family/dependant relative.

  • Bed & Breakfast

    Not accepted.

  • Commercial property close by

    Above or adjacent to restaurants, food outlets, public houses, launderettes, hairdressers or other premises which might represent a fire risk or adversely affect saleability, or where the surveyor’s comments are derogatory are not acceptable.

  • Construction Timber Framed

    Accepted, with durable outer leaf.

  • Construction All Timber

    Not accepted.

  • Construction Thatched

    Not accepted.

  • Construction Steel Framed

    Accepted, subject to a satisfactory structural engineer’s report.

  • Construction PRC

    Not accepted.

  • Construction Single Skin

    Not accepted.

  • Japanese Knotweed

    Not accepted.

  • Air BnB

    Accepted on Residential mortgages for up to 90 days per annum. 

  • Non Habitable Condition

    Not accepted - property has to be secure; structurally sound; insurable; have a working kitchen with running water, storage and ability to heat food; have a working bathroom with working lavatory, sink and ability to shower or bath.

  • Ex Local Authority

    Houses accepted, flats not accepted.

  • Flat Max Floors

    No Maximum. Above 4 Stories requires a lift.

  • Holiday/2nd Home

    Affordability calculation needs to cover both mortgage balances, max LTV 85% (sale of property accepted as repayment strategy up to 75% LTV).

  • Holiday Lets

    Not accepted (accepted up to 90 days per annum)

  • 2 kitchens

    Accepted, if in Granny annex (see above), otherwise not accepted.

  • Home For Dependent Relative

    Accepted, affordability calculation needs to cover both mortgage balances (max LTV 85%).

  • Leasehold

    Minimum 50 years unexpired term on lease at end of mortgage term, subject to valuers comments. Escalating Ground rents

    • New builds/conversions must have an initial minimum lease term of 125 years;
    • The maximum initial ground rent should initially be no more than 0.25% of market value;
    • The ground rent must not be reviewed less than every 10 years;
    • The ground rent must only be reviewed in line with the RPI or equivalent;
    • Event fees can only be based on the reasonable administration costs incurred.
  • Live/Work Units

    Not accepted.

  • New Build definition

    Property built/converted in last 12 months (based on completion certificate).

  • New Build warranties/guarantees

    Properties that have been built or converted in the last 10 years require suitable warranties/guarantees to be in place. A list of which is available on the UK Finance website www.ukfinance.org.uk.

  • New Build house

    85% LTV for residential, 75% max for BTL.

  • New Build flat

    85% LTV for residential, 75% max for BTL.

  • New Build Incentives

    Builder Incentives accepted up to 5% of the purchase price (deposit must be from applicants own resources). Builder incentive can include white goods, carpets and curtains, cashback, legal fees and a contribution towards stamp duty.

  • Recently purchased property

    Remortgages of recently purchased properties will only be accepted if 6 months has elapsed since completion of purchase.

  • Restrictive Covenants

    Not accepted.

  • Self Build

    Not accepted, unless completed and covered by a suitable structural new build warranty.

  • Solar Panels

    Accepted, providing no lease agreement exists.

  • Studio

    Accepted for residential, not accepted for BTL.

  • Floor Area

    Minimum Gross External Area (GEA) of 35m2

  • Valuation fee scale

    See product guide.

  • Right To Buy

    Not accepted.

  • HomeBuy Direct/Shared Equity

    Not accepted.

  • Shared Ownership

    Not accepted.

  • Help to Buy

    Not accepted.

  • Key Worker scheme

    Not accepted.

  • Property owned in Trust

    Not accepted.

  • 2nd Property

    Accepted if for own or dependant relatives use. (max 85% LTV). We will accept up to 75% LTV on Interest Only (with sale of property as a repayment vehicle) providing the dependent relative does not reside in the property with an additional 10% on capital repayment. There is no minimum property value for a second home. If a dependent relative is to reside then the residential interest only policy will apply.

Loan details

  • Min Term

    5 years.

  • Max Term

    35 years

  • Min Loan

    £50,000.

  • Max Loan

    Loans considered up to any level (max interest only 75% on both residential mortgages and BTL mortgages).

  • Max Loan by LTV Residential

    Max loan to value Loan amount
    90% Up to £500,000
    85% Up to £1,000,000
    80% Up to £1,500,000
    75% Up to £2,000,000
    70% Up to £2,500,000
    65% Up to £3,000,000
    60% Up to £10,000,000
    50% Over £10,000,000
  • Max Loan by LTV Buy to Let

    Max loan to value Loan amount
    75% Up to £2,000,000
    70% Up to £2,500,000
    65% Up to £3,000,000
    60% Up to £10,000,000
    50% Over £10,000,000
  • Deposit

    Deposit must be from own resources unless gifted by a close family relative for both residential and BTL applications. Where deposit is gifted, the donor must provide a letter confirming the money does not need to be repaid and they will have no financial interest in the property.

  • Part & Part

    Accepted, subject to interest only policy. Maximum LTV 85%.

  • Interest Only for Residential Applications

    • There must be a clear and believable means of capital repayment.
    • We require suitable evidence of the repayment strategy.
    • Maximum LTV is 75%.

    The following will not be accepted as suitable repayment vehicles:

    • Sale of property (unless meets criteria below, see acceptable repayment strategies).
    • Previous record of reducing debt.
    • Future potential income.
    • New investments (including those that have been in place for less than 12 months).
    • Inheritance.
    • Bonuses.
    • Future conversion to a Capital and Interest only mortgage.
    • Any strategy that relies on increasing house prices.
    • Sale of business.
  • Acceptable repayment vehicles (Please note that all repayment vehicles must be held in GBP)

    • Sale of investment property(ies) – equity must be equal to 120% of the interest only amount.
    • Sale of existing liquid investments (evidence of current value to be provided). 
    • 25% of current pension value (evidence to be provided). Refer SIPPS.
    • Sale of property - where borrowing is secured on a second property, sale of the asset is accepted as long as no dependent relative resides there.
    • Sale of Main Property: accepted on a minimum £600,000 property value.
    • Property Value £600,000 - £2m: Allow interest only downsizing up to 50% LTV and up to a further 25% LTV through a credible repayment strategy (see above). Total allowable 75%. Part Interest Only and Part Capital Repayment only permitted on applications up to 50% LTV.
    • Property Value £2m+: Allow interest only downsizing up to 50% LTV and up to a further 25% LTV through a credible repayment strategy (see above) or capital & interest repayment. Total allowable on Interest Only 75%. Part Interest Only and Part Capital Repayment is permitted.
  • Capital raising

    • Standard LTV for all purposes.
    • Purpose of capital raising required; evidence may be requested.
    • Funds will be held on retention for a maximum of 6 months (until required and satisfactory evidence provided).
    • Not available for speculative investment or business/commercial use.
    • Unencumbered properties are treated as remortgages. Refer to product guide for pricing.
    • Capital raising must be for the benefit of all parties to the mortgage.
  • Offers valid for

    Offers are valid for 5 months, new build offers are valid for 6 months.

Credit history

  • Previously Repossessed

    Not accepted.

  • Bankruptcy/IVA

    Accepted where a minimum period of 3 years has passed since discharge, subject to overall credit score and underwriter assessment.

  • Credit check/score

    Credit search and score obtained.

  • Credit Reference Agency

  • CCJ/Defaults

    Can consider unsatisfied CCJ/Default up to £500 and satisfied CCJ/Default up to £1000. Subject to overall credit score and underwriter assessment.

  • Mortgage Arrears

    Can consider up to 2 months arrears in the last 24 months. Subject to overall credit score and underwriter assessment.

  • Debt Management plans (Debt Relief Orders)

    Not acceptable.

  • Current/Recent Credit Arrears

    Can consider up to 3 months in arrears in last 24 months. Subject to overall credit score and underwriter assessment.

Buy to let

  • Rental calculation

    For new lending the rental cover required for the property is 140% of the mortgage interest amount calculated at a stress rate of 5.50% on products other than 5 year fixed rates - for 5 year fixed rates the stress rate is 5%. The assessment of existing lending to Portfolio Landlords will be stressed at 5.50%. Earned income may be considered, conditions apply. Also see Top Slicing below.

  • Top Slicing

    Earned income from up to 2 applicants can be considered to support buy to let applications where the rental income is equal to, or greater than, 100% cover of the mortgage interest amount calculated at Metro Bank’s 5.5% stress rate and the customer(s) have a minimum income of £50,000 for a single application, or £75,000 for a joint application.
    You are required to complete a budget planner and upload it at AIP stage, we then use this to ensure the disposable income exceeds the rental shortfall of the property or portfolio.

  • Non property owner

    Minimum of one applicant must be an owner-occupier. First Time Landlords accepted (exceptions considered if in work related accommodation).

  • Income

    No minimum income required, (unless using top slicing, see section above), one applicant must be earning an income other than rental. An assessment of funding living expenses and rental voids will be made.

  • Portfolio size

    Maximum of 10 Buy to Let properties in total of which no more than 5 Buy to Let properties are mortgaged with Metro Bank, or £5m of Metro Bank exposure, whichever binds first.

  • Properties

    Max 75% LTV for both houses and flats, no ex-local authority flats or studio flats.

  • Tenancy

    Single AST required of no more than 12 months. Family member, corporate housing associations, individuals receiving housing benefit, HMOs, student lets, holiday lets, multiple tenancies and individuals with diplomatic immunity are not accepted as tenancies.

  • Rental income

    Proof required via 3 months bank statements. Rent received in cash is not accepted. Income from rent is not permitted to support top slicing.

  • Consent to Let

    Considered upon request. Mortgage must have been with Metro Bank for a minimum of 12 months.

  • Consumer Buy to Let

    We class a CBTL mortgage as an application where all applicants do not own other BTL properties and since becoming the owner of the proposed security property the customer or their family members have lived in the property (e.g. the customer is completing a Let to Buy transaction or has inherited a property and resided in it prior to letting it out).

  • Portfolio BTL

    This is classed as any BTL application where the applicants will own either in sole name or jointly,
    the sum of 4 or more BTL properties with mortgages on completion, this includes any BTL properties owned in Limited Companies where the applicant(s) holds a personal guarantee.
    Portfolio rental income must provide 140% cover of the portfolio mortgage interest amount calculated at Metro Bank’s 5.5% stress rate, unless top slicing is being used, see section above.
    In these cases, further documentation will be required and sustainability of the portfolio reviewed.
    For the additional document requirements please refer to the useful documents section of the intermediary website, where you will find both the BTL Business Plan and the BTL Requirements documents.

  • Energy Performance Certificate

    Required confirming that an energy performance indicator of no less than E is in place (applicable to properties located in England & Wales only).