Coventry Mortgage Lending Criteria
We have not verified the information with the lender. You should not rely on this information. If you have an area of concern then please ask us.
Coventry Mortgage Lending Criteria
Mortgage Advances
Up to £1,250,000 75% LTV
Up to £2,000,000 65% LTV
Notes
Illustration Type = ESIS.
Mortgage is Portable, Mortgage is Flexible, Overpayments allowed.
The product(s) selected are fully portable. Please refer to our 'Moving your Mortgage to a New Property' brochure for
further information.
Coventry Building Society operates a restricted panel of intermediaries.
The Privilege Rate is available to those existing borrowers holding a residential mortgage that have remained on the
same Coventry scheme for 5 years or more please refer to Coventry Building Society.
A maximum term of 35 years is available for all other acceptable repayment methods.
Lender will consider advances subject to current lending policy
We no longer have a requirement for proof that payments have been resumed following a Covid-19 payment holiday
One mortgage valuation fee is waived up to a maximum amount of £670 if the Lender instructs the valuer. In some
instances different valuation assessments may be under taken. If applicable the actual fee you pay is shown in interest
rates and other costs.
For this mortgage, you will, during the period where early repayment charges apply, be allowed to overpay by up to 10%
of the mortgage balance outstanding, each calendar year without having to pay early repayment charges. The mortgage
balance outstanding is taken at the 1 January or at the start of your mortgage, whichever occurred last.
During the period where early repayment charges apply, any payments above the annual limit will be subject to an early
repayment charge on the basis shown in section 10 of this illustration. If you repay your mortgage off in full you will be
charged early repayment charges on the entire outstanding mortgage balance required to redeem your mortgage.
Following the period where early repayment charges apply, this mortgage allows you to make an unlimited amount of
overpayments without incurring any early repayment charges.
Any overpayment using the direct debit overpayment facility will be applied to the mortgage immediately and interest
recalculated. You will be advised of your revised repayment if applicable.
Capital Rest Period : Daily
Repayment Types
Repayment Yes
Endowment refer
PEP refer
Pension refer
Interest only (no RV) no
With Profits refer
Unit Linked refer
ISA refer
Split Repayment refer
Fees
Arrangement : £ varies Can be Added
Booking : None
Early Repayment Charges
varies
Higher Lending
None
Valuation
Basic:
Free
Product fee can be added to the loan.(Non-refundable)
One mortgage valuation up to the max £670, additional fees above this rate will be reduced. Only valuations conducted
by the Coventry Building Society’s panel of valuer's are acceptable. You may have one mortgage valuation (up to a
maximum of £670) which must be carried out by a valuer instructed by the lender. The valuation is for the Lender’s
benefit only and used to confirm whether they can lend on the property. It’s important to remember that the Lender
decides the type of valuation most appropriate to the application; therefore a physical inspection of the property may not
be required.
Funds Transfer Fee - £8.00 Added to loan.
Mortgage Exit Fee - £125.00 Payable on early redemption.
Acceptable Property Types
Freehold Flat No
Purpose Built Flat Yes
Converted Flat Yes
Flat Over Shop Refer
Maisonette Yes
Studio Flat No
Flying Freehold Yes
Thatched Yes
Timber Framed Yes
Concrete No
Agricultural Tie No
Flat Over 4 Storeys Refer
Listed Building Yes
Right to Buy
Max Discount% 100
Max Market Value% 90
New Build acceptable.
Ex-local authority flats and maisonettes are restricted to 70% LTV.
Will not lend on Freehold flats or Maisonettes.
Flats over certain types of commercial properties are restricted to 75% LTV.
Flats with more than 5 storeys are not considered, if they are ex local authority, or do not have lift access.
Flats with more than 10 storeys are not considered.
All property, flying freehold not to exceed 25% of the total property.
Timber properties are not normally acceptable but Coventry Building Society will consider modern timber framed
properties provided they have an outer skin of brickwork.
Steel Frame houses and all types of property <10 years with no NHBC or equivalent properties are not accepted.
Houses with 2 Kitchens and houses with no bathroom are not accepted.
Coventry Building Society will not lend in Isle of Man, Channel Island, Scottish Isles. Except Isle of Skye
For purchase applications, the vendor must have owned the property for a minimum of 6 months.
The maximum loan to value for a new build or converted apartment/flat is 75% LTV.
The maximum loan to value for a new build house is 85% LTV.
We define new builds 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 apartment/flat conversions where the number of apartments/flats in the
development exceeds ten.
Applications cannot be considered where the property offered as 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.
We will not lend to flats above or adjacent to workshops, restaurants, take-aways, public houses, sex shops, massage
parlours and premises that stock explosive or toxic materials (fireworks, dangerous chemicals etc.).
We will not lend to flats above or adjacent to void/empty premises.
* 'adjacent to' includes properties within an 'influential' distance. This will be determined by the valuer.
For unencumbered or where there is less than £5,000 outstanding on the current mortgage the maximum LTV is limited
to 50%.
New properties must have the benefit of either:
A Professional Consultant’s Certificate which are valid for the first 6 years or
An acceptable builder’s guarantee which is valid for the first 10 years
Second hand properties less than 10 years old must normally 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 6 years, the case will be acceptable if it was built with the
benefit of a Professional Consultant’s Certificate where cover was valid for the first 6 years.
A Professional Consultant’s Certificate must be for a minimum period of 6 years from the date the property was built.
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
conveyance confirming that the lease is acceptable.
For New and existing borrowers where the property is in a Multi-storey, multi-occupancy residential building (flats) with
external wall systems (cladding) or external wall attachments (i.e. balconies) these are subject to review of our valuer's
who will use the latest RICS guidance on cladding.
Where the RICS guidance states an EWS1 form is required, the property is only acceptable where an EWS1 form is
satisfactorily completed by a suitably qualified professional, and the valuer confirms that option A1, A2 or B1 has been
selected and confirms that the property is suitable security.
The acceptable options and definitions are shown in the table below Option A - Where external wall materials are unlikely
to support combustion
A1
There are no attachments whose construction includes significant quantities of combustible materials (i.e. materials that
are not of limited combustibility or better)
A2
There is an appropriate risk assessment of the attachments confirming that no remedial works are required
Option B - Where combustible materials are present in external wall
B1
The fire risk is sufficiently low and no remedial works are required.
Where the valuer has noted that option A3 or B2 has been selected or no EWS1 form is available the case must be
declined. The only exception to this is where the application is for an existing customer; see Existing Customers - Further
Borrowing with an unacceptable or no EWS1 form
EXISTING CUSTOMERS – FURTHER BORROWING WITH AN UNACCEPTABLE OR NO EWS1 FORM - POLICY
Where the valuer has noted that option A3 or B2 has been selected or no EWS1 is available and the further borrowing is
for essential repairs the case should be treated on a case by case basis (refer to Lender).
Where the borrowing is not for essential repairs the application should be declined.
Accepted Locations : England, Scotland, Wales
Requirements
Bank Statements 2 months
At Least 3 Months Pay Slips Yes
P60 Yes
Proof Of Residency Yes
Life Policy To Be Assigned No
Previous Lender References Refer
Insurance
Buildings Conditional
Conditions
Min Loan
Max Loan £2,000,000
Max Portfolio of BTL Loans none
Min Age 18 years
Max Age 75 years
Min Term 1 years
Max Term 35 years
Minimum age is 18 on application
The applicant (s) must have a minimum of 1 year in continuous permanent employment. If they are in a probationary
period and it is the applicant's first job the application should normally be declined.
Additional security
required where LTV exceeds 75%.
The maximum number of applicants is 4.
Refer to Coventry Building Society for Directors' requirements.
Panel Solicitors only.
Nationality and Right of Abode requirements:
Applications from foreign nationals with indefinite leave or a right of abode to live and work in the UK can be considered
provided that:
None of the applicants hold any level of diplomatic immunity.
Each applicant must have permission to live and work in the UK.
Each applicant must have been granted indefinite leave to remain or a Right of abode to live and work in the UK. A copy
of the document confirming the right must be obtained and kept on file indefinitely.
In addition to all normal status checks, a satisfactory history of employment and residency in the UK over the last two
years must be established and verified.
The Step Up Facility is no longer available
Where applicants are self-employed and the loan amount is >=£200,000 a 3 months personal bank statements are
required.
Applications not paid in pounds sterling will not be accepted.
Standard ID requirements:
Group A - to confirm who they are
-Passport (UK or foreign) – current, valid and full
-Valid (UK or EEA) photo card driving licence (full or provisional)
-EEA member state identity card
-Full old style paper driving licence (UK) – current, signed
-DWP pension entitlement letter – valid for the current year
-Birth certificate/adoption certificate (under 18s only)
-NHS medical card/document, showing holder’s name, DOB, NHS number (under 18s only)
Group B - to confirm their name and address
-Full or provisional UK photo card or old style paper driving licence – current, signed
-Bank/building society statement – less than 3 months old and not printed off the internet. Those issued by the Coventry
are not acceptable
-House insurance certificate – valid for the current year
-Council/local authority tax bill – less than 12 months old and valid for the current year
-Utility bills (i.e. gas, electricity, water) or cable/satellite/phone bill (excluding mobile phones) – less than 3 months old
and not printed off the internet
-NHS medical card/document, showing holder’s name, DOB, NHS number (under 18s only)
Remortgages with additional lending
Max LTV 75% up to £1.25m and 65% up to £2m.
If the property is unencumbered or there is less than £5,000 outstanding on the current mortgage the maximum LTV is
50%.
Below notes concern ongoing Covid-19 situation
From 15 September 2020 we will no longer be accepting furloughed income for employed applicants. Any applications
that are already in the pipeline will not be impacted, unless customers wish to increase their LTV above 65%.
If a customer is currently furloughed we can accept their application if this is supported by a letter from their employer.
This letter should confirm that they’ll be returning to work on or before 2 November 2020, their annual salary from this
date and that there have been no changes to the terms and conditions of their employment.
Applications on zero hours contracts accepted from the following key workers
-NHS bank nurses and locums
-Non-NHS bank nurses
-Care home workers
-Supermarket workers, including delivery drivers
-Retained/on-call firefighters and Armed Forces Reservists using zero hours income criteria.
Cryptocurrency is an unacceptable form of deposit including where it has been converted back into sterling.
The property must be insured by you in accordance with the conditions of this mortgage, The level of buildings cover
must be no less than the rebuilding cost of the property.
Foreign Citizens Refer
Ex-Patriates Not Accepted
Income
Based on Income > 0
5 + 5 or 5 joint < 50% LTV
4.49 + 4.49 or 4.49 joint < 95% LTV
Min months in current position 1
Min months in continuous service 12
Min no. of years accounts 2
Average years taken to calculate income 1
Will consider declining profit Refer
Outgoings
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.
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:
5 years or more of the mortgage term in retirement or, 50% or more of the mortgage term in retirement
The lower of current income or anticipated retirement income (both must be net of any on-going 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).
If you would like to discuss individual cases in more detail, please call our Intermediary Team
For employed applicants:
Backstop Income Multiple:
For joint applications where the applicants have at least 20 years before reaching our maximum lending age, the current
income multiples are dependent on the LTV of the application and the applicants’ gross income.
New Mortgages.
LTV Limits. Income Multiple within the affordability calculator.
<=50% 5 x
>50% to <=65% 4.49 x
>65% to <=75% 4.49 x
>75% to <=90% 4.49 x
>90% 4.49 x
For applicants within 20 years of our maximum lending age at the date of the application, a reduced maximum income
multiplier will be applied to take into account the reduced mortgage term that is available as in the table below:
New Mortgages
Time to Maximum Lending Age. Income.
<=£40,000 >£40,000
16 to 19 years 3.2x 3.4x
11 to 15 years 2.6x 3x
6 to 10 years 2x 2.2x
0 to 5 years 1.2x 1.2x
Proof of Income for Employed & Employed – Furloughed income
Acceptable Levels:
Basic Salary – 100%
Regular overtime, bonuses, shift allowance or commission – 50%
Annual Bonus - 50% of the average of the latest 2 years annual bonus, or 50% of the most recent years annual bonus
figure, if lower
Annual non-pensionable allowance forming an integral part of the remuneration package – 100%
Proof:
Latest P60 and last payslip (latest P60 is not required for further advances)
Latest 2 month’s bank statements (first time buyers only)
Where Regular overtime, bonus, shift allowance or commission is being used for affordability, -
Where it is identified that the applicant is employed by a family business or a family member 2 month’s bank statements
must be obtained.
Where the latest P60 is not available the latest 3 monthly or 12 weekly pay slips are acceptable.
Evidence of income must provide a record of employment covering the last 12 months
For applicants who have been in their current employment for less than 6 months, the latest P60 and last payslip are
normally sufficient to prove employment and earnings but a previous employer’s reference should be obtained if the
underwriter considers it necessary.
Maternity / Paternity income;
Where an applicant is on maternity/paternity leave, the income that they expect to receive after their leave should be
used when calculating affordability. The applicant’s plans to repay during maternity/paternity leave should be determined.
Where the customer advises they will return to work on the same terms, the normal (pre-parental leave) income can be
used.
The applicants latest P60 and payslip prior to going on parental leave and the most recent payslip which shows the client
is on parental leave e.g. Statutory Maternity Pay information should be obtained.
Where the customer advises they will return to work on reduced hours, the reduced income should be used.
An employer’s reference is required to confirm this.
Self employed applicants;
Directors with a 20% share or more in the company they work for:
We will request an Accountant's Certificate directly from the accountant on submission of the application.
At the point of application proof of income must be no more than 12 months old.
We may request bank statements on submission of the application.
Max LTV for Capital raising 65%
Please note we only accept accounts audited by the following professional accountancy bodies:
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)
For Sole Traders, Partnerships, Sub-contractors:
Latest two years tax assessments (SA302s*)
At the point of application proof of income must be no more than 15 months old.
We may request bank statements on submission of the application.
*SA302s must be official and are not acceptable where they are printed from the HMRC website.
We may request further information/clarification directly from the applicant's accountant - please ensure full contact
details are provided.
Contracted Personnel
There must be a minimum of 6 months remaining on the applicant's existing contract. Where there is less than 6 months
remaining, then evidence of 24 months continuous employment in the same profession is required.
To prove income the lender will need the following:
Contracts demonstrating continuous employment in contracting over the last 12 months.
An employer's reference giving full details of the current contract.
Where there is less than 6 months remaining, then evidence of 24 months continuous employment in the same
profession is required.
For zero hour contracts, documentary evidence confirming a consistent level of earnings over the last 12 months.
Daily Rate Contractors
Continuous contracting history over the last 12 months.
There must be a minimum of 6 months remaining on the existing contract. Where there is less than 6 months remaining,
then evidence of 24 months continuous employment in the same profession is required.
To prove income the lender will need the following:
Copies of contracts demonstrating continuous employment in contracting over the last 12 months.
There must be a minimum of 6 months remaining on the existing contract. Where there is less than 6 months remaining,
evidence of 24 months continuous employment in the same profession is required.
Latest two months personal bank statements (First time buyers only)
Income must be equal to or greater than £50,000 (gross) based on the following calculation :Daily Rate x 5 x 41
We have added the following onto our list of acceptable sources of income:
Colleague flexible benefit
Additional duty hours
Flight pay allowance
Nursing bank
Shift allowance
Car Allowance is an acceptable form of income provided it is an integral part of the salary package and that it is not a
refund of expenses already paid out by the applicant.
UNACCEPTABLE SOURCES OF INCOME:
Income from temporary employment
Child/working family tax credits
Disability allowances
All other state benefits
Maintenance (including court ordered)
Bursaries and other educational subsidies
Foster income
Rental income where it is secondary income, expect where the applicant can confirm that the income is derived from a
business, can provide 2 years accounts (1 year Buy to Lets) or two SA302s and meet all other self employed criteria
Please note that this list is not exhaustive and any similar income source may be declined.
Total gross income is made up of:
For applicants currently employed/self employed and where the mortgage term will go into retirement.
Pension Projection
Private pension - Annual statement of pension due on retirement (including pension projection) or Letter from the
pension provider confirming pension due on retirement.
State retirement pension (SRP) - Annual statement of pension due on retirement
or Letter from the Department for Work and Pensions (DWP).
Company/ Occupational pension - Annual statement of pension due on retirement
or Letter from the employer/ pension provider confirming pension due on retirement.
For fully-retired applicants:
State retirement pension (SRP) - At least one of the following is required: Latest two month's bank statements showing
monthly pension payment or Latest annual letter from the Department for Work and Pensions (DWP)
Private pension - At least one of the following is required: Latest two month's bank statements showing monthly pension
payment or Annual pension statement.
Company/ Occupational pension - At least one of the following is required:
Latest pension slip or two month's bank statements showing monthly pension payment or Latest annual statement from
the pension provider.
Drawdown on pension fund - Annual statement of benefits from the pension provider.
Interest income from investments - Latest two year's tax assessments (SA302s*).
Dividend income from a portfolio of shares that owns a share in a business (100% of dividends will be acceptable) -
Latest two year's tax assessments (SA302s*).
Income from a company the applicant owns that continues to provide an income in retirement - Latest two year's tax
assessments (SA302s*).
Rental income from a mortgage-free property - Latest two year's tax assessments (SA302s*).
Pension documents provided must be no more than 12 months old.
Pension statements must be from the pension provider.
We reserve the right to request an accountant's certificate to finalise our lending decision.
Income from Umbrella companies:
Coventry Building Society will potentially consider contractor income that is paid via an umbrella company. Applicants
paid via an Umbrella company are acceptable subject to meeting our Daily Rate contractor or Contracted personnel
criteria.
Below notes concern ongoing Covid-19 situation
Hire Purchase Taken into account
Personal Loans Taken into account
Overdraft Taken into account
Credit/Store Cards Taken into account
Child Maintenance Taken into account
Child Education Taken into account
Extra Income:-
Other Income - Guaranteed Add 100% to income before multiply
Other Income - Regular Add 50% 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 No
Non Contributory Pension Add 100% to income before multiply
Car Allowance Add 100% to income before multiply
Adverse Credit
CCJs/Defaults : Accept:
1) Max £500.00 in Defaults. These must be fully paid. This condition does not incur any rate loading.
2) Max £500.00 in CCJs. These must be fully paid. There must be no CCJss in the last 6 months. This condition
does not incur any rate loading.
3) Max £250.00 in Defaults unsatisfied. This condition does not incur any rate loading.
4) Max £250.00 in CCJs unsatisfied. There must be no CCJss in the last 6 months. This condition does not incur any
rate loading.
Arrears : Accept:
1) Max 1 missed payment in the last 36 months, which may be unpaid at the time of application. This condition does
not incur any rate loading.
Bankruptcy/IVAs : Accept:
1) IVA must be discharged at least 6 years prior to application. This does not incur any rate loading.
2) Bankruptcy must be discharged at least 6 years prior to application. This does not incur any rate loading.
Repossessions : Not accepted.
CCJs over 3 years old considered on an individual basis.
Defaults on Mortgages and secured loans must be satisfied
Defaults over 3 years old, less than £1500 satisfied or not considered on an individual basis.
IVA and Bankruptcy not acceptable for FTB