Sainsbury’s Bank
Lending Guide
For mortgage intermediary use only
Version 0.1
Eligibility criteria at a glance
Here’s a quick view of our lending criteria so you can make any necessary
checks before submitting an application. You can find full details of our
criteria later on in this document.
Applicant
• We accept a maximum of 2 applicants.
• All applicants must be at least 18 years old at time of application. The mortgage term can’t go past
any applicant’s 76th birthday.
• All applicants must have been resident in the UK for three continuous years (but we will consider
applications from members of the British Armed Forces who don’t meet this criteria).
• We don’t accept interest only applications.
• We don’t accept guarantor applications.
• Applicants must have a good credit history - please see our Adverse Credit History Section.
Lending
• Minimum loan amount is £40,000 and maximum loan amount is £1,000,000.
• Minimum term is 5 years and maximum term is 40 years.
• Remortgage – at least one applicant must have owned the property for 6 months and be resident in
the property.
• £20,000 gross household income as minimum.
• We do not permit second charges to remain or exist at the time of drawdown.
• Must meet the following LTV requirements:
Purpose
Amount of lending
Max LTV
First time buyer, home mover and remortgage
£40,000 - £500,000
90%
£500,001 - £750,000
80%
£750,001 - £1,000,000
75%
Debt consolidation
Max 75% LTV (remortgage only)
Property
• Property location – the property must be in Scotland, England, Wales or Northern Ireland.
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We don’t lend in the Channel Islands or Isle of Man.
£60,000 minimum property valuation
Tenure:
• Freehold
• Leasehold (minimum term of 85 years must remain at the point of drawdown)
• Commonhold
• Absolute ownership (Scotland)
We don’t accept applications for:
• Right to Buy properties where the applicant is purchasing or remortgaging their local authority/
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housing association property and the property is subject to penalty clauses if sold within the preemption period;
Shared ownership schemes where the borrower(s) will not have exclusive ownership of the property;
Consumer Buy to Let;
Buy to Let.
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Our lending criteria
Absence from employment
Applicants must have been in continuous employment for at least 3 months before submitting an application.
Where the applicant does not meet this criteria, we may consider, subject to a review by an Underwriter,
applicants who have a minimum track record of 12 months employment in the same discipline/sector.
Accountant Qualifications
Accountants signing and verifying an applicant’s financial statements or accountant’s certificates must be
a member of a suitable professional body i.e.:
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Institute of Chartered Accountants, CA, ACA or FCA
Institute of Chartered Accountants in Scotland, ICAS, ACAS, FCAS
Institute of Chartered Accountants in Ireland, ICAI
Chartered Association of Certified Accountants, ACCA or FCCA
Chartered Institute of Taxation, ATII or FTII
Association of Authorised Public Accounts, AAPA, or FAPA
Chartered Institute of Management Accountants, CIMA, ACMA or FCMA
Association of Accounting Technicians, MAAT or FMAAT
Association of International Accountants, AAIA or FAIA
Adverse Credit History
We use credit reference agencies to look at an applicant’s credit history.
We won’t consider applications from an applicant who has been subject to the following:
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Had a property previously repossessed by a mortgage lender;
Bankruptcy Order or an Individual Voluntary Arrangement in the last 6 years;
County Court Judgments or Defaults in the last 6 years with a total value of greater than £500;
For applications where LTV is greater than 75%, applicant must have no more than 1 missed
payment in the last 12 months. If LTV is less than 75%, we’ll consider an applicant who has missed
2 payments in the last 12 months;
Had 3 payments in arrears showing at the credit bureau (irrespective of LTV) within the last 36 months.
Meets the FCA definition of impaired credit history.
A ‘soft footprint’ credit search will be completed at Decision in Principle (DIP) stage. This will be
‘upgraded’ to a ’hard’ footprint ’at Full Mortgage Application (FMA).
Affordability
We’ll only lend when we’re confident that the applicant will be able to repay the mortgage.
The amount we’ll lend to an applicant is based on our assessment of affordability, taking account of
income that is regular and sustainable and after deducting regular commitments (credit and other e.g.
child maintenance) and living expenses. Please see our section on Income Types and Evidence for
acceptable sources of income and income weightings.
We don’t include commitments with less than 90 days to expiry in the affordability calculation but they
should be detailed at time of application. Where there are debts that are due to be repaid prior to the
completion of the mortgage, they may be subject to a request for additional information.
We accept employed and self-employed income up to an applicant’s 70th birthday or customer stated
retirement age, whichever comes first.
In addition to our affordability assessment, we’ll also restrict the amount that an applicant can borrow by
our income multiples as detailed below:
• 4.5 times gross income for (1) LTV >85% or (2) first time buyers;
• 5.0 times gross income for all others.
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Applicants
We’ll accept a maximum of 2 applicants.
Armed forces personnel
Please see BFPO
Arrears
Please see Adverse Credit History
Back to Back
Back to back is typically where the seller has owned the property for less than 6 months.
For purchase applications we’ll decline the application if the seller has owned the property for 6 months
or less.
Similarly for remortgages we won’t lend if the applicant has owned the property for 6 months or less.
The only exception to this is where the property has been inherited and it can be shown that the
property has gone through probate.
Bank Statements
We need to see 3 months’ personal bank statements (most recent to be dated within the last 35 days)
for each applicant and these should show the applicant’s income (where applicable) and monthly
expenditure. This could be from one account or a series of accounts.
Bank statements should be in good order. Our underwriters reserve the right to decline the application
where they can see behaviour which gives cause for concern (e.g. charges relating to mismanagement of
overdraft, unpaid items).
Online bank statements are acceptable as long as they’re in PDF format, the applicant’s name, sort code
and account number are clearly shown and the dates shown cover a consecutive 3 month period (with
the most recent dated within the last 35 days).
If the account that the applicant will use to pay the mortgage and household expenditure is different
from the one used to prove income, then we’ll need to see 3 months (most recent) statements for this
account too.
For self employed applicants, we need to see their most recent (to be dated within the last 35 days) 3 months’
business bank statements, in addition to their personal bank statements.
Bankruptcy
Please see Adverse Credit.
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BFPO/Armed Forces (Military, Naval and Air Forces)
We’ll consider all applications from members of the British Armed Forces, including those with a British
Forces Post Office (BFPO) address.
Service personnel who have raised the deposit for their property through the Forces Help to Buy Scheme
(through the Loan [not Equity Loan] Scheme) are acceptable, as long as the monthly repayment,
including the mandatory insurance payment, is included in the affordability calculation; this will be
confirmed from the Personal Information Note (PIN) that the MoD issues to the applicant. These costs
should be keyed under ‘Other Commitments’
If the applicant intends to live in the property, but is posted to another location during the term of the
mortgage we’ll consider giving consent to let, as long as the customer is able to afford the mortgage and
any accommodation costs if they stay elsewhere.
Blocks of flats
All flats in blocks and Scottish tenements not exceeding ten storeys (ground floor with nine floors above)
in height, will be acceptable at the discretion of the Bank’s Valuer and subject to the following:
• a lift must be present if the block is over 5 storeys in height.
• all flats in blocks with >5 storeys ≤10 storeys must each achieve a minimum valuation of £250K.
British Nationals working overseas
We’ll consider applications from applicants who work overseas, as long as the UK is the applicant’s main
residence. We won’t accept an ‘ex-pat’ type scenario where the applicant wants to buy a property in the
UK and return at a later date. We’ll only accept income that is paid in pounds sterling.
Where an application is received from a UK national working overseas the following criteria must be met:
– Income must be evidenced via UK HMRC documentation;
– Salary must be paid in sterling into a UK bank account;
– Dependants of the applicant must reside in the residential property;
– Where there are no dependants and the residential property is vacant for periods greater than 30 consecutive days the application will be declined.
Builder cash deposit
Please see New Build.
Buy to Let
We don’t accept applications for buy to let purposes.
Committed Expenditure
Our preferred credit reference agency will confirm any financial commitments the applicant has. Please
also tell us about any commitments which haven’t yet started but which will start after the mortgage is
drawn down.
Commitments should be keyed with the following details:
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Name of lender;
Balance outstanding;
Monthly payment (if appropriate) ;
Expiry Date (if appropriate)*;
Source of funds for debt repayment (if ‘to be repaid’ box is ticked)**.
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A maximum of 4 rows per category of commitment can be keyed. For applicants with more than 4 in
each category please contact us for advice on how to key.
When we assess affordability we’ll take the higher of the commitments the customer declared or those
identified at the credit bureau.
* We’ll exclude commitments with less than 90 days to expiry from the affordability calculation.
** We may need to see proof that the customer will have the funds if they intend to repay the debts
from savings, a gift from a relative or the sale of assets.
If the customer intends to repay the debts from borrowing other than the mortgage requested, the
monthly cost of the borrowing should be included under ‘Financial Commitments’.
The applicant’s overdraft balances should be keyed as they are at the end of the month and we’ll check
them against their bank statements.
Construction Types
Please see Property Types.
Contractors
We’ll accept applications from contractors. Please also see Fixed Term Contracts.
A contractor who invoices through their own limited company or as a sole trader or partnership should be
keyed as ‘Self-Employed’ and must:
– have been employed on this basis for at least 6 months with at least 3 months remaining; and
– be able to show at least one year’s income from this type of employment.
We’ll allow Income to be annualised for contractors who can only demonstrate 18 months of income as
detailed above. For the purpose of assessing affordability the current year’s income should be annualised
and the ‘projection’ box ticked.
When we calculate affordability we’ll use 100% of the lower of:
(1)the latest year’s income; or
(2)the average of the last two years’ income.
Conveyancing
Assistance with legal fees
This will depend on the product. See the product section at: sainsburysbank.co.uk/intermediaries for
further details.
Fixed panel
We have a wide panel of solicitors for borrowers to use. We are unable to accept anyone who is not on
our panel.
Separate representation
Separate representation is not currently available through Sainsbury’s Bank.
County Court Judgment’s (CCJ’s)
Please see Adverse Credit History.
Credit score
All applications are credit scored. We will decline applications which don’t meet our credit score threshold.
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Cross tenure property
We don’t accept applications for cross tenure properties.
Debt consolidation
Only debt which can be traced at the credit bureau can be consolidated onto the loan. Only remortgage
applicants can use additional borrowing for debt consolidation. We won’t allow this for:
– Self-employed applicants with less than 3 years trading;
– Any application where LTV is greater than 75%.
Declines
If we’ve declined a full mortgage application for affordability, we’ll only consider an appeal if new
information, which wasn’t known or apparent at the time of the application, has become available. We
will tell you the main reason why the application has been declined (bureau information, affordability or
lending criteria).
Deposit
The minimum deposit depends on the product.
Please see Gifted Deposit and New Build Incentives for more information on these.
Diplomatic Immunity
We won’t accept applications where either of the applicants has diplomatic immunity.
Direct Debits
It’s a condition of the mortgage that the customer sets up a direct debit on a current account held with a
UK based bank to make their contractual monthly payments.
The bank account that the direct debit is set up on must be in the name of at least one applicant.
Borrowers can select a date between the 1st and the 31st for payments to be taken if there is a preferred date.
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Discounted Purchase
We’ll consider applications where the property is bought at a price that’s less than the property’s value,
as long as the applicant can show that there’s an established relationship between the seller and the
buyer. Our solicitors will also need to have a declaration of solvency from the seller or appropriate
indemnity insurance.
An established relationship is defined as follows:
• The applicant is buying a property from a related person; or
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The applicant has been renting the same property and their landlord has offered to sell it at a
reduced price.
The definition of a related person is as follows:
(1)that person’s husband, wife or civil partner;
(2)a person (whether or not of the opposite sex) whose relationship with that person has the characteristics of the relationship between husband and wife; or
(3)that person’s parent, brother, sister, child, grandparent or grandchild.
We’ll base our maximum lending on the valuation price, as long as it meets our LTV criteria.
Early repayment charges
Applicants may have to pay an early repayment charge if they repay the whole or part of their mortgage
early (including if they move to a different product or lender) during a certain period.
Although early repayment charges apply to our products, we give customers an annual overpayment
allowance equivalent to 10% of the remaining mortgage balance. This means customers can choose to
increase their monthly mortgage payments or make lump sum payments up to this allowance each year
that early repayment charges apply, without incurring any charges. The overpayment allowance starts
again each year from the anniversary of the drawdown, or the start of the new rate following a switch,
and will be based on the current balance at the time.
If a customer goes over their annual overpayment allowance for a given year, we’ll make any early
repayment charge on the amount they’ve repaid over the allowance.
Employment
The applicant must have been employed with their current employer for at least 3 months before
they apply. Where the applicant does not meet this criteria, we may consider, subject to a review by
an Underwriter, applicants who have a minimum track record of 12 months employment in the same
discipline/sector.
We can accept more than one source of income from employment. Applicants can have a primary and
secondary source of income. The applicant is required to tell you if they know of any future changes to
their employment or if their role is under threat of redundancy.
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Expenditure
Please tell us about all regular monthly household expenditure for the applicant.
This should include non-credit commitments that the applicant would be unable or unwilling to give up
without an impact on their family or lifestyle.
The household is defined as the applicants applying for the mortgage and any people financially
dependent upon them who will be/are living in the property. Expenditure for children or adults who are
provided for separately under a maintenance agreement or other type arrangement, should be captured
under ‘Other Commitments’.
Where appropriate the household expenditure should relate to the new property, for example the council
tax on the new property, not any existing property.
Any expenditure relating to the upkeep of other properties, such as a second home or buy-to-let, should
also be included.
The applicant should also tell us about any other changes to their expenditure that will happen once their
mortgage has been drawn down
Please tell us about your applicant’s expenditure in the following categories:
Types of expenditure
Housekeeping (Food, Cleaning etc)
Utilities – Energy (Electricity, gas, other fuels)
Utilities – Water
Basic communication (e.g. telephone & broadband)
Council tax
Buildings Insurance (inclusive of contents)
Household maintenance (including ground rent, service charge)
Essential Travel
Clothing and footwear
Household goods and services
Personal goods
Basic Recreation (e.g. TV subscriptions, gym memberships, socialising)
Childcare (Less credits/vouchers)
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Family purchase
Please see Discounted Purchase.
First time buyer
An applicant who has never owned a property, whether in the UK or abroad.
On joint applications, both applicants must meet this definition to be classed as first time buyers.
Fixed Term Contracts
Applicants who are on a fixed term contract or a contractor, whose employer/payroll solution provider/
umbrella company deducts full PAYE and National Insurance, should be keyed as ‘employed’.
Applicants must be employed on a fixed term contract basis for at least 6 months at the time of
application, with at least 3 months remaining.
If this is the applicant’s first fixed term contract they must show continuity of employment in the same
sector or discipline for the previous 12 months. Please see the Income and ID guide at:
sainsburysbank.co.uk/intermediaries.
Foreign currency income
We’ll only accept income which is received in pounds sterling
Foreign currency loans
We only offer mortgages in pounds sterling.
Freehold flats
We won’t accept freehold flats unless the borrower owns the freehold of the whole building, or freehold
reversion/Tyneside arrangements apply and there are no more than four flats in the building.
Funds transfer fee
A fee that is chargeable to electronically transfer the mortgage funds to the borrower or their solicitor.
Gifted deposit
We’ll accept a gifted deposit from a family member as long as the donor confirms that the amount of the
deposit is not repayable and that the donor will hold no interest in the property following completion of
the mortgage.
Guarantors
We don’t accept guarantor applications.
Home Improvements
For applicants borrowing more than £25k for home improvements, we might ask for written estimates of
the proposed home improvements. If we need an updated valuation of the property, the customer will
need to meet this cost.
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Identity - Proof of Identity and Residence
We use electronic verification systems to check application data against a variety of public databases. If the
details don’t pass these checks, then we’ll need proof of ID and residency. We’ll investigate gaps in voters
roll information, to make sure we can confirm 3 years’ address history.
If we can’t find the applicant on our electronic verification systems, then we need to see proof of ID and
residency. We need to see one document from list A in the table below (confirming the applicant’s name)
and one different document from list B (confirming their current address). We’ll accept documents
electronically through the online portal, as long as the document is legible and clearly shows all the
relevant information. We’ll also accept original documents by post.
UK Nationals, European Economic Areas (EEA) Nationals and Swiss Nationals
List A – ID Documentary Evidence
List B - Address Documentary Evidence
Current valid full UK Passport
Current utility bills, less than 12 months old
(excluding those printed from the internet).
Current valid driving licence
(full or provisional photo card or old style full)
Current council tax demand letter or statement less than
12 months old
Current National or Northern Ireland Identity card
Current Instrument of a court appointment
(such as grant of probate).
Current Firearms certificate or shotgun license
Current UK based bank statement or credit/debit card
statement less than 12 months old (excluding those
printed from the internet).
Recent evidence (obtained within the last 3 months)
of entitlement to a state or local authority-funded
Copy of a Valid full UK and Northern Ireland Driving
benefit (including housing benefit and council tax ben- License (old style paper)
efit), tax credit, pension, educational or other grant.
Current National ID Card (EU Only)
HM Revenue and Customs notice of coding (less than
twelve months old)
Non-EEA Foreign Nationals (With Indefinite leave to remain in the UK)
Any relevant document from List A
Any relevant document from List B
Valid non-UK or non-European Economic Area
(non-EEA) passport
Proof of Indefinite leave to remain in the UK
Current Passport containing stamp for indefinite leave to remain in the UK
Copy of current visa/residency permit (front and back for new biometric formats)
Written confirmation of indefinite leave to remain in the UK from the Home Office
Incentives
Please refer to New Build.
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Income assessment
Income Types & Evidence
All income required to support the affordability of the mortgage should be keyed.
We need to see proof of the income needed to support the mortgage. Please see the Income and
ID guide at: sainsburysbank.co.uk/intermediaries for more details of supporting documentation.
Acceptable types of income are detailed below together with the weighting that we will apply. Income
other than salaried or self-employed income should be keyed under ‘Other sources of income’.
Income Type ( 100% used)
Income Type ( 80% used)
Basic Salary
Overtime
Employer’s Allowances
(e.g. car, large town, shift)
Bonus
We will restrict
to 100% of gross
annual salary.
Commission
Statutory Maternity Pay/Allowance
Please key under
‘Other sources
of income’
Investment income
Rental Income from property
(when applicant is not deemed
self-employed).
Maintenance income*
Child benefit, working and/or child tax credit*
Disability Allowances*
Universal Credit (we will only accept the
component parts relating to child tax credit
and working tax credit)*
Self-employed income
(i.e. Gross Salary, dividends, drawings, profit)
Notes:
* We require to be satisfied that the mortgage will remain affordable when the payments end but as a
minimum there must, at time of the full mortgage application, be at least 5 years of the arrangement
remaining or the income will be excluded from the affordability assessment.
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Unacceptable sources of income
We won’t accept the following sources of income:
Unacceptable sources of income
Expenses
Housing Benefit
Mileage/Fuel allowances
Income support
First Aid Allowances
Job Seekers Allowance
Broadband and phone allowances
Bereavement Allowance
Educational Grants/Bursaries
Income from casual employment
(other than zero hours contracts)
Foreign currency income
Income from Lodgers (ie income which is not subject to
a formal AST/SAT Tenancy Agreement)
Income Deductions at Source
Expenditure which is deducted at source by the employer should be declared on the application as
follows and keyed under ‘Other commitments’. Where the commitment has no end date, the mortgage
end date should be keyed.
Gross income should be keyed before deductions.
Type of Deduction
Included in Affordability
Student loans
Yes
Car payments
Yes
Attachment of Earnings Order
Yes
Season Ticket Loans
Yes
Other loans from employer
Yes
Salary sacrifice schemes – e.g. to purchase
retail vouchers
May be excluded*
GAYE
May be excluded*
Private Healthcare
May be excluded*
Save as you Earn/Sharesave Scheme
May be excluded*
Personal pension contributions
Yes but may be excluded**
AVCs
Yes but may be excluded**
*Where the applicant has confirmed that the payment is discretionary and may be cancelled to support the
mortgage payment.
**For applicants Lending into Retirement we will not accept applications where the applicant intends to cancel
the pension contribution to support affordability.
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Interest only
We don’t offer interest only mortgages.
Inter-family purchase
Please refer to Discounted Purchase.
Lending into retirement
We’ll consider employed income up to the applicant’s declared retirement age, or 70th birthday,
whichever is the earliest.
We’ll use the lower of current income or evidenced retirement income over the mortgage term, to
calculate affordability.
We might ask for more details or evidence to show that the applicant’s retirement age is plausible.
The above applies to both employed and self-employed applicants.
Lending to the retired
We’ll consider applications from retired applicants as long as they meet our standard lending policy.
Pension income should be set out in the ‘Source of Income’ section of the application only if the applicant
is receiving this income at the time of the application and can show us evidence of this.
Live/work units
We don’t accept live/work units.
Loan purpose
We accept house purchase and remortgage with additional borrowing cases.
We don’t offer additional borrowing if it’s for:
– injecting capital into a business;
– a new business start-up;
– currency speculation;
– buying stocks and shares;
– paying a tax bill.
Loan size
Minimum is £40,000 and maximum is £1,000,000
Maximum age
The mortgage term mustn’t go past any applicants 76th birthday.
Maximum exposure
Maximum number of residential properties with Sainsbury’s Bank (all applicants) is 2.
Maximum aggregate loan exposure with Sainsbury’s Bank is £2,000,000.
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Maximum LTV and loan offered
90% LTV for loans up to £500,000
80% LTV for loans of £500,001 to £750,000
75% LTV for loans of £750,001 to £1,000,000
For new build houses, the maximum LTV is 85%.
For new build flats, the maximum LTV is 75%.
Minimum age
All applicants must be 18 or older at time of application.
Mixed use properties
We don’t accept applications for mixed use properties. A property is classified as ‘mixed use’ if there
is any element of commercial use – i.e. it is used in part for non-residential purposes, such as a shop,
doctor’s surgery or office. This includes situations where the property itself is wholly residential but there
is a commercial use of adjoining/surrounding buildings.
New Build
We define ‘new build’ as follows:
• Property built/converted within the last 24 months (based on the date of the completion certificate).
•
Property not previously occupied (for converted properties that is since the conversion took place).
We restrict the amount that can be borrowed against the new or newly converted property as follows:
Property Type
Max LTV
House
85%
Flat
75%
We’ll also need proof that the new build/newly converted property is covered by one of the
following certificates:
• NHBC Buildmark
• NHBC Solo
• Zurich Municipal
• Castle 10 New Home Warranty – provided by Checkmate
• LABC New Home Warranty
• Premier Guarantee for New HomesBuilding Life Plan Ltd
• Buildzone
• CRL Management Ltd
• Certification by certain professional consultants may be accepted subject to it being in standard
Council of Mortgage Lenders (CML) format, where the property has been built/converted within the
last 6 years
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New Build Incentives
We’ll accept cash incentives of up to and including 5% of the purchase price without affecting the
purchase price. If the value of the cash incentive is more than 5%, we’ll deduct the balance of the
incentive above 5% from the purchase price, or valuation price whichever is lowest.
The following incentives are acceptable without impacting the purchase price.
• White goods (where not included as standard specification);
• Floor coverings;
• Integrated lighting (down lighters);
• Kitchen upgrade, including tiling and worktop;
• Bathroom upgrade;
• All electric upgrades – i.e. additional sockets, TV points etc;
• Turfing/landscaping, fencing.
Offer Validity
Offers are valid for 180 days from the date of the first offer.
Over-indebtedness
We won’t lend to applicants/existing customers who already have a high level of debt or who would have
a high level of debt if they took out the proposed mortgage.
We’ll decline an application from customers who meet one or more of the following criteria.
Over-indebtedness Criteria
Amount based on outstanding balances
1. Total unsecured debt, including defaults
> £50K
2. Revolving unsecured debt
> £25K
3. Total unsecured debt to income
≥ 100%
4 Revolving unsecured debt to income
≥ 75%
In exceptional circumstances, we might consider an appeal of an application declined on the basis of
over-indebtedness, as long as the application meets all other policy requirements, including affordability.
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Overpayments
The applicant can make regular or lump sum overpayments on their loan at any time.
If there is an Early Repayment Charge, they may have to pay a charge on any regular or lump sum
overpayment made.
During any Early Repayment Charge period they can pay off up to 10% of the opening balance within a
12 month allowance period without charge. The first 12 month allowance period will begin from the initial
completion date and refresh on every anniversary thereafter.
Any overpayment made in excess of 10% of the opening balance within a 12 month allowance period,
will be payable on the amount of the excess only.
There are no restrictions to making overpayments after the product Early Repayment Charge period(s)
have ended.
Upon receipt of any overpayment, the applicant’s future payments will not change unless they request it
to do so.
Porting
The applicant has the right to transfer this loan to another property; this is subject to the the mortgage being
transferred to a new property purchase and your circumstances meeting our lending criteria at that time.
The mortgage is portable without requiring payment of any Early Repayment Charges except in the
following circumstances:
– Where the amount you wish to transfer to your new property is less than the balance outstanding at the time of the transfer. Any charge will only apply to the amount of the reduction and not the whole balance outstanding.
– Where you choose not to transfer over your loan on its existing product terms.
– Where the sale and purchase do not complete on the same date you will have to pay any Early Repayment Charge in full, however, we will refund this amount to you provided the date of the new purchase completes with us within 180 days of closing your mortgage on the current property.
You can only transfer your existing product terms up to the amount outstanding at the time of the transfer.
The product for any additional amount required can be chosen from our product range at the time.
Probationary Employment
We’ll accept applicants who are on a probationary period as long as they meet the following criteria.
• We need to see 12 months’ previous track record of employment in the same sector/discipline. For
details of what evidence we need to see to prove consistency of employment please see the Income
and ID guide at: sainsburysbank.co.uk/intermediaries.
• If the applicant is in their first permanent job with a long probationary period, then they must show
that they have worked for that employer for at least 12 months. Please see Income and ID guide at:
sainsburysbank.co.uk/intermediaries.
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Products
We won’t lend if the loan is for:
– a Right to Buy property, where the applicant wants to buy or remortgage their local authority/
housing association property and the property is subject to penalty clauses if it’s sold within the pre-emption period;
– shared ownership schemes, where the borrower(s) will not have exclusive ownership of the property;
– a new application for a loan on a property with an existing second charge (unless the second charge will be repaid as part of the transaction).
We don’t offer the following types of lending:
– self-build instalment release mortgages;
– self-certification mortgages
– bridging loans;
– equity release/lifetime mortgages;
– help to buy/mortgage guarantee schemes;
– interest roll-up mortgages.
Product fees
We charge product fees on some of our mortgages. If we’ve added the fee to the loan, then we’ll charge
interest at the product interest rate over the term of the mortgage.
We cannot add the fee to the loan where it will take it over our maximum loan to value of 90%. In this
instance, the applicant must deduct the fee from the overall borrowing amount. In all other cases, the
product fee can be added to the loan.
Property location
We’ll lend on properties in England, Scotland, Wales and N. Ireland. We don’t lend against properties in
the Channel Islands or Isle of Man.
The property must be valued at £60,000 or more.
Property Types – Acceptable
We’ll only lend where we have a first ranking security over the property being purchased or remortgaged
and where we’re satisfied that the property is readily saleable in normal market conditions.
In general, properties offered as mortgage security must be of traditional construction as determined by
our valuer, be in a good state of repair and acceptable for buildings insurance. We’ll consider properties
of non-traditional construction on a case by case basis. We’ll rely on our valuer to decide whether the
property is suitable and marketable for mortgage purposes.
If our valuer tells us that work is necessary to bring the property to a suitable condition for lending,
we might keep back some or all of the mortgage advance until the work recommended by the valuer is
carried out.
We won’t lend on properties which:
• have no kitchen and/or running water;
• have no bath/shower and/or running water;
• are suffering from a progressive Japanese Knotweed infestation as determined by our valuer;
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• are suffering progressive structural movement which requires monitoring;
• have on-going structural issues;
• have been underpinned - unless our valuer tells us that the property is structurally sound and that
the appropriation certification has been obtained.
Acceptable Non-traditional construction types:
1) Concrete Construction
• Wimpey no Fines
• Laing Easiform
2) Pre-Cast Reinforced Concrete (PRC) where the property has been repaired under the PRC (Homes) Ltd repair scheme. These were usually built between 1945 and 1965.
3) Large Panel Systems (LPS) are acceptable for houses and maisonettes as long as they are no more than two storeys high and subject to structural engineer’s report.
4) Timber framed houses – as long as they were built after 1970 with brick, reconstituted stone or rendered block work.
Property Types – Unacceptable
We won’t lend on the following types of property:
• bed and breakfast;
• farms, smallholdings and houses which are subject to agricultural occupancy restrictions;
• flats or maisonettes of large panel systems;
• flying freeholds affecting more than 25% of the property;
• freehold flats / maisonettes (unless the borrower owns the freehold of the whole building, subject to
leases to any other flats in the building);
• houses in multiple occupation (a property with more than one tenancy agreement in place);
• houseboats/mobile homes/ park homes/ caravans;
• properties with restrictions such as sheltered accommodation with a minimum age limit for occupiers;
• uninsurable properties;
• properties built using high alumina cement or mundic;
• properties with less than 30 square meters internal floor space;
• landlocked properties;
• properties adapted or altered for commercial use;
• prefabricated reinforced concrete (PRC) homes which remain unrepaired;
• mundic properties where the property is not graded ‘a’ or ‘a/b’ following a petrographic test ;
• properties with more than five acres as part of the title;
• properties where power lines or electricity supply apparatus are located directly over and/or on the
site which are not for domestic supply to the subject property;
• properties with more than one annexe;
• properties with more than 2 kitchens;
• leasehold in Scotland;
• fee farm grant in Northern Ireland.
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Reduction in Income
We’ll consider applications from applicants who are currently on maternity/paternity leave or taking a
period of unpaid leave from their employment.
Temporary Reduction in Income (Less than 6 months)
We can use the value of the applicant’s income when they return to work in the affordability calculation
as long as:
– the applicant will be back at work earning that income within 6 months of the full
mortgage application;
– the customer can prove the level and timing of the income by a letter from their employer
(on the employer’s letter headed paper) confirming:
(a) date of return to work; and
(b) that the applicant’s existing terms and conditions /salary/contract of employment will be the same as it was before the applicant took leave.
– the applicant can show us how they’ll meet the monthly mortgage payment and their other ongoing commitments and expenditure while their income is reduced.
Permanent reduction in Income (6 months or more)
We’ll assess affordability against the anticipated lower level of income. The customer must show us
independent evidence of the timing and level of income they have declared.
Repayment methods
We only accept mortgages on a capital and interest basis.
Retention
A retention is when the valuer identifies important work that needs to be done on the property and
recommends that part of the mortgage amount be kept back until the work is carried out.
If our valuer recommends a retention of more than £5,000 then we will keep that amount back until the
work is carried out. We might need to ask the valuer to re-inspect the property before we’re happy to
release the retained amount. If this is the case, then the applicant will be responsible for meeting the
cost of re-inspection.
Scottish Transcripts
We won’t accept transcriptions of Scottish Home Reports. We always need to see a standard mortgage
valuation report based upon a physical inspection of the property.
Second property
We’ll consider lending for a second residential owner occupied property as long as the application meets
our lending criteria and the applicant is buying the second property for one of the following reasons:
•
Second home due to work location with 1 party to the mortgage resident;
•
A holiday home in the UK which will be for personal use only.
When we calculate affordability please take into account the household costs for the second property –
e.g. council tax, utilities.
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Self build
We don’t accept applications for self-build purposes. Although we will accept self build properties once
they’re fully built /converted and meet our warranty requirements (please see New Build).
Self employed
We’ll accept applications from the self-employed.
A self-employed applicant could be:
•
a sole trader;
•
a partner in a business;
•
a director who owns 20% or more of the company. (Where a company director holds a shareholding
representing less than 20% of the issued share capital we would normally assess them as
employed);
•
a foster carer.
We’ll only lend to self-employed applicants who can show they’ve been trading for 2 years or more. If
the applicant is self-employed and a first time buyer, we will require them to have been trading for a
minimum of three years.
For contractors, see Contractors.
Shared equity
We don’t lend on shared equity schemes where the borrower(s) won’t have exclusive ownership of the
property.
Shared Ownership
We don’t lend on shared ownership schemes.
Tenure
We’ll accept freehold, leasehold, commonhold, absolute ownership (Scotland only).
Term
Our minimum term is 5 years.
Our maximum term is 40 years (or up to the applicant’s 76th birthday, if earlier)
Underpayments
The applicant can request to reduce their monthly payments in part or in full for a period of time subject
to the following criteria:
• they must obtain our agreement to this prior to the monthly payment;
• they must have overpaid in advance (see Overpayments section). However if the applicant uses any
overpayments made to reduce their monthly payment or formally amend the term of the loan, then
this will remove ability to underpay on future payments.
• The amount underpaid within a 12 month allowance period must not exceed a total of 2 monthly
payments. The first 12 month allowance period will begin from the initial completion date and refresh
on every anniversary thereafter.
Unexpired leasehold term
There must be a minimum term of 85 years remaining on the lease at the point of draw down.
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Valuation
We’ll only accept a bank instructed standard mortgage valuation report based upon a physical inspection
of the property, carried out by a suitably qualified valuer who is a member of our panel of valuers.
Valuation issues – structural problems, specialist reports, subsidence etc.
We might need to see further specialist reports dependent on the advice provided by our valuer. In this
case, the applicant will need to instruct a suitably qualified specialist and pay for the specialist report.
Our valuer will review the specialist report and give us advice on the suitability of the security for our
mortgage purposes.
Valuation services and fees
Standard Valuation Report
This report is to give us a current market value so that we can decide how much we’re prepared to lend on
the property. The applicant shouldn’t rely on this report to assess the suitability or salability of the property.
Costs of Valuations Carried out by our Panel of Valuers
Standard Valuation Report Cost
Valuation up to
including related administrative costs
(incl. VAT)
£100,000
£191.00
£150,000
£220.00
£200,000
£248.00
£250,000
£276.00
£300,000
£309.00
£400,000
£365.00
£500,000
£422.00
£600,000
£478.00
£700,000
£539.00
£800,000
£596.00
£900,000
£652.00
£1,000,000
£708.00
£1,250,000
£840.00
£1,500,000
£953.00
£1,750,000
£1,169.00
£2,000,000
£1,287.00
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Re-Inspection Valuation Report
This may be required where applicants are purchasing a ‘New Build’ or where the initial valuation report
recommend(s) a retention sum pending completion of essential work/repairs. The valuer is required to
revisit the property to validate the completion of the works and re-affirm the finalised value of the property.
Re-Inspection
Valuation Report
£60.00
There are other types of valuation reports which an applicant may wish to obtain when purchasing their
property to provide more detailed information on the condition of the property or construction including
subsidence, foundations, external walls, history of the property and future maintenance. Our valuers may
be able to assist with this wider service the applicant is looking for and if so, they can contact them via
the undernoted details:Connells Surveying Services Ltd
Valuation Management Centre
Cumbria House, 16-20 Hockliffe Street, Leighton Buzzard
Bedfordshire, LU7 1GN
Tel: 01525 218500
Zero Hour Contracts
We’ll consider applicants who are on zero hour contracts as long as they can show us they’ve had
continuous employment for the last 24 months. Applicants should be keyed as self-employed.
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Your home may be repossessed if you do not keep up repayments on your mortgage.
Sainsbury’s Bank plc, Registered Office, 33 Holborn, London EC1N 2HT (registered in England and Wales, no.3279730) is authorised by the Prudential Regulation Authority and
regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Register no. 184514). Sainsbury’s Supermarkets Ltd is an appointed representative of
Sainsbury’s Bank plc.
CJC-029 03/17