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Lending policy

View our full intermediary lending policy online

A-Z lending policy

The purpose of this search facility is to provide guidance on Virgin Money's Lending Criteria. You can either browse alphabetically or enter a keyword you would like to search from the panel on the left hand side.

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LTVs over 85%

Residential lending between 85% and 95% is available to both remortgage and purchase customers. On a New Build house the customer must provide a minimum 10% deposit from their own resources.

Capital raising is not available for any customers looking to take a remortgage greater than 90% LTV.

Where the LTV is above 85%, the whole of the mortgage must be taken on a repayment basis, and the following conditions must be met:

  • Minimum of three items of active credit, or one item which is greater than six months old
  • Customers must be up to date on all credit at the point of application
Leasehold

Leasehold properties must have an unexpired term of at least 85 years at the point of application.

We will lend up to a maximum of 20% of the units in any one block / development.

In all instances a satisfactory valuation report is required before Virgin Money will confirm a property is acceptable.

Let to Buy
  • If the property to be mortgaged is going to be the customers main residence then the maximum LTV is 85%. If the property will not be the customers primary residence (i.e. second home) then the maximum LTV is 75%
  • For all applications a simultaneous completion must be made on a new residential property
  • There must not be any mortgage arrears in the last six months or the case will be automatically declined
  • The existing property must be let and on a formal recognised tenancy basis
  • Rental income must be at least 145% of the existing mortgage payment in order to be considered as self-supporting
  • If the other mortgage is not self supporting the shortfall will be taken into account within the affordability calculation as a mortgage payment
  • Deposit monies must be from customers own resources

Please see below for additional documentation requirements*

*If the applicants current property is to be let or they have other Buy To Lets, evidence that the rent covers the mortgage payment by 145% is required. If there is a rental shortfall between 100% and 145%, calculated at a notional rate of 5.50%, we will accept the customer's personal income to cover this. Where personal income is used for affordability, a minimum combined gross income of £50,000 is required. Personal income is not considered for BTL portfolio landlords, LTVs greater than 75% or where the term extends beyond 75 years of age.

The rental income for a straight balance swap BTL remortgage must cover the mortgage payment by 125% calculated at a notional interest rate of 5.50% across all products.

The mortgage payment and rent must be evidenced with one or more of the following:

To confirm monthly rental income:

  • A current Assured Shorthold Tenancy agreement (or Scottish / Northern Ireland equivalent)
  • Bank statement to evidence the rent
  • A letter from a reputable letting agent which would include
  • Members of Association of Residential Letting Agents (ARLA)
  • Members of The Property Ombudsman scheme
  • Members of The Royal Institution of Chartered Surveyors (RICS)

To confirm monthly mortgage payment:

  • Copy of the new Buy To Let/Consent to Let offer (if letting proposed is new and the mortgage payment is clearly evident)
  • Latest mortgage statement (for existing BTL)

Where a customer has multiple Buy To Let portfolios a copy of their written Buy To Let schedule will be accepted. The portfolio must be present on the customer’s credit file.

Letting to a Family Member (Regulated Buy to Let)

Although Buy to Let mortgages are not regulated, scenarios where the tenant of the property is the customer's immediate family (e.g. parent, grandparent, child, grandchild, brother, sister) are regarded as regulated loans therefore they must proceed on a standard residential product.

The following restrictions must be met:

  • Maximum LTV 80% (LTV restrictions also apply, please see Maximum LTV section).
  • Affordability will be assessed as per our residential lending policy. The customer must be able to afford the repayments (including any other mortgage payments) without taking into account any rent received. Repayment vehicles for Interest Only mortgages must follow our residential lending policy.
Limited Company

The Directors remuneration can be taken into account as income along with their share of net profits. However we do not allow dividends for limited companies. For Limited Companies three months’ personal bank statements will be requested for self-employed applicants where their shareholding is less than 100% per application.

If net profits are increasing - Average of the Directors remuneration and share of net profits over the past two years will be used.

If net profits are decreasing - The most recent year's share of profits plus the individual Directors remuneration for that year will be used.

If the company has made a loss within the last two years Virgin Money would be unable to lend.

If the company's net worth has been negative in the last two years Virgin Money would be unable to lend.

Net profits of a limited company are often referred to as Operating Profit after taxation.

Please note - If the customer is classed as self employed by way of having a 20% or more shareholding in a Limited Company, HMRC SA302's are not acceptable as income verification.

Limited Liability Partnership

Customers who have a shareholding in a large LLP (e.g. Accountancy / Law firms) can be classed as self-employed providing the following criteria is met:

  • They must have continuous employment with their firm for a minimum of two years as an employee or shareholder
  • If their income has increased over the last two years an average will be used for affordability
  • If their income has decreased over the last two years the most recent year will be used for affordability
Loyalty Discount

Once a customer has had their mortgage with us for seven years, a Loyalty Discount is available provided that:

  • They do not continue to benefit from a special rate (such as a product discount, a Guaranteed Rate, or Fixed Rate) or other product benefit (such as a Cashback)
  • They are not within an ERC period

The Loyalty Discount will be at least 0.25% off Virgin Money’s Standard Variable Rate for the rest of the life of the loan. The Virgin Money Loyalty Rate is 4.74% (effective from 1 October 2018 for existing customers).

If a customer moves home and takes a new mortgage product with Virgin Money (or they transfer their existing mortgage to their new home) they will lose the benefit of any time that has accrued towards the calculation of the seven years. On completion of the new mortgage the seven year period will begin again from year 0.

If a customer transfers to a new mortgage product without moving home the accrual of the seven year period will continue (provided they meet all other eligibility criteria).

Customers can choose to move to the Loyalty Rate (provided they meet all other eligibility criteria) even when they are within an ERC period but they will have to repay the ERC applicable to their current mortgage product.

Please note: the Loyalty Discount does not apply to Buy To Let mortgages.

Maximum LTV
Residential maximum loan to valueValuation or purchase price, whichever is lower
£0 - £500,000£500,001 - £1,250,000>£1.25m
PurchaseInterest only75%75%75%
Repayment95%80%75%
RemortgageInterest only75%75%75%
Repayment95%80%75%
BTL maximum loan to valueValuation or purchase price, whichever is lower
£0 - £437,500>£437,500
Non Portfolio BTL*Interest only80%75%
Repayment80%75%
BTL PortfolioInterest only75%75%
Repayment75%75%
*Max LTV is 75% where personal income is used.

There is no LTV restriction for existing mortgage customers applying for a pound for pound product transfer.

The maximum LTV for existing residential customers seeking additional borrowing is 85% (other restrictions may apply).

Residential additional borrowing available up to 85% LTV, except for the purpose of debt consolidation where a maximum of 80% LTV applies.

There is no maximum loan size on pound for pound product transfers.

Maximum LTV on Interest Only

The maximum LTV for residential customers taking a mortgage on an interest only basis is 75%. For residential customers taking a part and part mortgage, the maximum LTV is 85%, of which up to 75% LTV can be on interest only. Where residential borrowing exceeds 85% LTV, the whole mortgage must be taken on a full repayment basis.

The maximum LTV for BTL customers taking a mortgage on an interest only basis is 80%. For BTL customers taking a part and part mortgage, there is no restriction on the maximum interest only element.

Maximum Loan

The maximum loan on Residential applications is £2million and BTL applications is £1million. LTV restrictions also apply, please see Maximum LTV section.

A maximum loan to income multiple of x4.49 applies where one or more applicant is self-employed.

A maximum loan to income multiple of x4.00 applies to interest only and part and part loans.

For loans above £500,000 a maximum loan to income multiple of x4.49 applies.

The above income multiples are based on our usual allowable types of income e.g. 60% of bonuses.

Mortgage Credit Directive (MCD)

The MCD provides an EU-wide framework of conduct rules for mortgage activities. It sets minimum regulatory requirements that member states must meet to provide consistency in protecting consumers taking out credit agreements for residential property.

Although the UK has a robust set of regulations for mortgage activities already, which protect consumers in a similar way, the introduction of MCD brings new legislation and changes to the FCA handbook, and particularly MCOB.

For full details of our approach, please view our MCD guides in Useful Downloads.

New Build

We define new build as a property where construction is completed and/or the property is first occupied, in the last 24 calendar months.

  • Maximum LTV on new build flats is 75% for Residential and BTL
  • Maximum LTV on new build houses is 90% for Residential and 80% for BTL
  • Help to Buy: equity loans are available for first and next-time buyers with smaller deposits
  • Requirement for the acting solicitor to confirm the property has been satisfactorily completed and that a New Build Warranty acceptable to Virgin Money is in place
  • We will lend up to a maximum of 20% of the units in any one block / development

Clients buying a new build property may receive an incentive from the builder or developer to purchase the property. This must be declared at the time of application, or later if the incentive changes.

Cash incentives

Cash incentives of up to and including 5% of the purchase price are acceptable without affecting the loan amount. Where the value of the cash incentive is greater than 5%, the balance of the incentive above 5% must be deducted from the purchase price when calculating the maximum loan amount. Where the LTV is greater than 85%, cash incentives are not accepted.

We accept the following cash incentives:

  • Cashback deals
  • Stamp Duty (Land and Buildings Transaction Tax in Scotland) paid
  • Payment of fees to professionals, such as solicitors and valuers
  • Guaranteed rental payments for a period after completion
  • Gifted deposit from the builder or developer (please note, family gifted deposits are acceptable in line with standard policy and do not need to be deducted from the purchase price)

Non-cash incentives

The following incentives are acceptable to Virgin Money without impacting the loan amount:

  • White goods (where not included as standard specification)
  • Carpets and curtains
  • Kitchen upgrade (including tiling and worktops)
  • Bathroom upgrade
  • All electric upgrades (i.e. additional sockets, TV points, etc)
  • Turf and landscaping

Part-exchange transactions

Where the builder or developer is purchasing the customer’s existing residential property part-exchange transactions are acceptable. We will accept this in addition to cash and non-cash incentives.

Part-exchange is not available on a Help to Buy: equity loan.

Help to Buy: equity loans

If a property is being purchased through one of the government Help to Buy Equity Loan schemes, incentives of any kind (cash and non-cash) cannot be more than 5% of the value of the property.

For full details, please view the incentives section.

Custom Build Mortgages

We are working in partnership with BuildLoan to help your customers realise the dream of building their own home.

To find out more, view our handy Sales Aid Link opens in a new window

Offer – New Build (non Shared Ownership)

Please note the Offer for a new build property is valid for 30 weeks (seven months). If an extension is required beyond this time, a further seven month extension can be granted subject to the application being re-underwritten against current lending policy. The customer will also be required to choose a new mortgage product from those currently available.

Our Offer for a custom build mortgage is valid for 16 weeks (four months). If an extension is required beyond this time, a further two month extension can be granted subject to the application being re-underwritten against current lending policy.

For information on new build Shared Ownership Offer validity visit the Shared Ownership section of our A-Z Lending Policy

For further details, please view the Offer extensions section of our A-Z Lending Policy.

New Build Warranty

An acceptable New Build Warranty must be in place for any property which has been built or converted in the last 10 years, or is to be occupied for the first time. Acceptable warranty schemes are:

  • NHBC
  • Premier Guarantee
  • LABC New Home Warranty
  • BLP (Building Life Plans)
  • Build-Zone
  • Castle 10 / Checkmate
  • Zurich New Build (Zurich withdrew from the market 30 Sept 09)
  • Build Assure
  • Global Home Warranties
  • International Construction Warranties (ICW)
  • Advantage HCI
  • Aedis
  • Protek
  • Q Assure
  • 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 10 years
Non-EEA Nationals

The customer(s) must have unrestricted rights to live and work in the UK.

Requirements:

  • Passport or National Identity Card
  • Home Office approval or Unrestricted work
  • Two items of ID confirming residence in the UK
  • Must have evidence of three years consecutive UK addresses