The most common issue when keying additional borrowing is exceeding the maximum loan to value (LTV) for the requested borrowing type.
Below you will find the maximum LTV limits for additional borrowing types. If more than one type of borrowing is applicable to the application, the lowest LTV limit will apply.
Maximum LTV of 85%*
Acceptable loan purposes
- Like for like remortgage
- Buy out partner's interest (non-borrower)
- Non-structural home improvements: includes boiler replacement, new kitchen or bathroom, replacing double glazing or central heating installation.
- Structural home improvements: includes internal wall removal, extending a property, major roof works or a new staircase.
- Buy an additional or final share in shared ownership: key as a shared ownership application on the loan requirements screen of NFI Online.
- Buy a share in the freehold or buy land to extend security: this isn't allowed on shared ownership.
- Buy land or property separate from the security: borrowing to buy a property/land that'll then be let out isn't acceptable. This isn't allowed on shared ownership and right to buy within the discount clawback period.
- Remortgage with additional mortgaged properties in the background: this includes second home or buy to let property.
- Repay Help to Buy Equity Loan: a Help to Buy Equity Loan (including Scottish First Home Fund) must be repaid in full. You can't request any other additional borrowing as part of the remortgage application. If the LTV doesn't exceed 80%, you should key this as 'Pay off second charge' on NFI Online.
- Buy freehold title or new extended lease: key the new lease term on the application. For example, if the current lease is 55 years but when completed it'll be 150 years, key 150 years. Please contact us for shared ownership applications.
- Other personal consumption: includes holiday, car or school fees. We don't lend for business purposes. This isn't allowed on shared ownership and right to buy (within the discount clawback period).
Maximum LTV of 80%*
Acceptable loan purposes
- Repay unsecured debts - This includes credit cards, personal loans or hire purchase. This isn't allowed on shared ownership and right to buy (within the discount clawback period).
- Pay off second charge - we'll class any other equity loan (Not Help to Buy) as a second charge. This isn't allowed on shared ownership and right to buy (within the discount clawback period).
* If the application includes borrowing additional funds for structural home improvements, and a retention has been applied, we'll base the product LTV on the post-works valuation. If you don't apply retention, we'll base the LTV on the value of the property in its current condition.