Buy to Let Lending Criteria

Overview
Buy to Let mortgages
Minimum loan: £25,001 unless otherwise stated
Valuation:

Minimum £60,000 (£40,000 in Northern Ireland) unless otherwise stated

For Scottish purchases a new lender instructed valuation is required. We will not accept a vendor valuation in these circumstances.

Maximum loan: £500,000 per property unless otherwise stated
Maximum total borrowing

£1,500,000. Maximum of 3 Buy to Let mortgaged properties per applicant (either solely or jointly) in total across all lenders including any with Bank of Ireland Group.

Loan types:

For property purchase and remortgage only

At least one applicant must live in a home which they own (whether subject to mortgage or not).

Payment types: Repayment, interest only or a combination of both.
Loan tiers: 75% up to £500,000. Fees may be added to the loan provided they do not exceed £2,500 or 2.5% of the loan (whichever is lesser).
Property:

The following property types are not acceptable:

  • Newly built flats or conversions (built or converted within the last 12 months)
  • Properties less than 10 years old that are not covered by an approved new home warranty scheme or Professional Consultant's Certificate
  • Any property that is subject to a private sale
  • Where the existing owner will become the tenant upon completion
  • Properties outside Mainland UK. Please contact us if your property is located on any Scottish island except Skye, Bute, Lewis & Harris, Mainland Orkney, Mainland Shetland, Arran, Mull, Islay, Whalsay, Yell, South Ronaldsay, West Burra, Tiree and Unst which are acceptable
  • Studio flats, freehold flats, retirement flats, flats with unacceptable access arrangements (e.g. rear external staircases) or flats within a block where the lenders valuer reports inadequate maintenance of communal areas
  • Ex-local authority or ex-public sector flats that are greater than 4 storeys high or that have open decking access or where the value is less than £90,000
  • Flats converted from office buildings or refurbished ex-local authority blocks
  • Leasehold terms of less than 85 years at the start of the mortgage
  • Properties being purchased under a Right-to-Buy, shared ownership, or shared equity arrangement
  • Properties which include commercial usage
  • Properties with occupancy restrictions
  • Remortgages where you have owned the property for less than 12 months
  • Properties being acquired under an assignable contract or from a property investment club/company
  • Purchases where the vendor has owned the property for less than 12 months (except where we have given consent)
  • Properties with communal heating, hot water or other services where the property is not individually metered
  • Subdivided houses where no leasehold title exists

 

Please call for further details if the property is built from anything other than brick or stone, if the roof is not tile or slate, or it is a self built property.

Solar panels may be acceptable - please call for more details.

Age

Minimum: 21

Maximum: 80 at expiry of mortgage term

Term Maximum: 35 years or the number of years it will take (the eldest) applicant to reach 80 (whichever is lesser). Minimum: 5 years.
Overpayments:

You can overpay at any time during your mortgage term.

If you’re in a promotional period, you can overpay a minimum of £500 and a maximum of 10% of the outstanding mortgage balance (as at 31st March the previous year) without incurring any early repayment or administration charges.

Once the promotional period is over, the amount you can overpay is unlimited, however if you pay off your mortgage in full charges may apply.

Rent cover:

Mortgages that are 65% LTV or less or that are fixed for 5 years or more

The rental income must be at least 145% of the monthly interest due. This is calculated using either the initial product rate or 5%, whichever is higher.

Example: 

Mortgage £100,000
Product rate 4.75% x 5% (product is below 5% minimum)
Sub Total £5,000
  x 145%
Annual rent required £7,250
Monthly rent required £7,250÷12 £605

Mortgages greater than 65% LTV that are not fixed for 5 or more years

The rental income must be at least 145% of the monthly interest due. This is calculated using either the initial product rate or 5.5%, whichever is higher.

Example:

Mortgage £100,000
Product rate 4.75% x 5.5% (product is below 5.5% minimum)
Sub Total £5,500
  x 145%
Annual rent required £7,975
Monthly rent required £7,975÷12 £665
The rental income will be confirmed by the valuer. All rent must be received in GBP.
Ability to pay: Your application will be reviewed to ensure your ability to pay, including the level of unsecured and mortgage debt held in relation to your income. 
Minimum income:

At least one applicant to earn a minimum income of £25,000.

Employment status: Employed or self employed (1 year minimum trading and the last year's accounts required).
Refinance:

Additional funds can be considered except for the following purposes:

  • Business purposes
  • Speculative purposes
  • Overseas property (including timeshare)
  • Payment of tax
  • Debt Consolidation
  • Payment of gambling debts
 
Tenancy Information
Purchases
England & Wales
Scotland & Northern Ireland
With vacant possession With tenant in situ With vacant possession With tenant in situ
Yes Yes Yes No
Remortgages Yes Yes Yes Yes
Tenanted Possession Restrictions The existing tenancy must have commenced after 28 February 1997 and the existing tenant must not have resided in the property before the date of the agreement

Scotland: Remortgages will only be considered provided the tenant has not been resident in the property 5 years earlier than the date of our offer

 

Northern Ireland: remortgages will only be considered if the existing tenancy is a protected shorthold agreement or an uncontrolled letting

Tenancy Types

The tenancy must not exceed 2 years in duration and must normally be written in one of the following formats:

  • England & Wales: Assured Shorthold Tenancy (AST)
  • Scotland: Shorthold Assured Tenancy (SAT)
  • Northern Ireland: Protected Shorthold Agreement or Uncontrolled letting

Student lets are acceptable subject to a maximum of 4 tenants on a single AST (or equivalent)

Areas subject to selective licensing are acceptable

Licensable Houses in Multiple occupation (HMOs), holiday lets or lets to family members are NOT acceptable

Company/housing association lets can be considered but tenancy agreements will need to be approved by Bank of Ireland’s legal department

Use of Letting Agent

 

Not mandatory
General lending criteria
Lending areas: Properties in England, Scotland (including the Scottish islands of Skye, Bute, Lewis & Harris, Mainland Orkney, Mainland Shetland, Arran, Mull, Islay, Whalsay, Yell, South Ronaldsay, West Burra, Tiree and Unst - please contact us to discuss properties located on any other Scottish island), Wales and Northern Ireland (unless otherwise stated).
Property owner:

Transactions are only acceptable where the seller is the owner or registered proprietor of the property, and has been for at least 12 months.

If you’re remortgaging, the registered owner or proprietor must have owned the property for a period of at least 12 months.

Nationality: Applicants are normally required to be resident in the UK for the 3 years preceding the mortgage application. Foreign Nationals from within the European Economic Area (EEA) have automatic rights of residency and work, so will be assessed for status in the same way as a British citizen. Non EEA citizens need to demonstrate rights to work and reside in the UK and can apply to borrow up to a maximum of 75% Loan to Value. These rights can be shown by passport stamps or Home Office papers. The right to remain in the UK must be for a sufficiently long period to justify the granting of a long-term loan.
Early Repayment Charge: If you repay all or part of your loan before the end of the early repayment period, you may be charged an Early Repayment Charge to cover any losses that the lender might otherwise incur. When you repay the whole of the loan you must pay the lender any mortgage release fee they charge at the time of repayment. If you have deferred payment of the lending fee you must also pay this. For part repayments, an additional administration fee will apply.
Clean Credit History:

We will not lend to you if you have ever:

  • been bankrupt
  • been subject to an Individual Voluntary Arrangement (IVA)
  • owned a property which has been taken into possession  (including voluntary possession)

 

We will normally only lend to you, if in the last 3 years you have had no:

  • arrears on mortgages, fixed loans or rent
  • more than two consecutive missed payments on credit or store cards
  • more than one CCJ to maximum of £250, and not within the last 12 months

Missed mail order or telecoms payments are normally disregarded

Payday loans: If you have had a payday loan within the last 12 months we won’t normally lend. If you have taken out a payday loan over 12 months ago then your case will need to be looked at individually to assess affordability.
Free Legals for Remortgagers: If stated in the Offer of Loan, Bank of Ireland UK will pay for the legal fees and disbursements (excluding additional work, see below) providing the remortgage transaction is handled via Legal Marketing Services, and is completed. The firm of solicitors is instructed to act for Bank of Ireland UK only. If applicants wish to arrange their own legal representation they will be responsible for the legal costs and disbursements incurred. Please note: Bank of Ireland UK will not pay for charges relating to additional work outside the scope of a standard remortgage transaction. This includes further valuation reports, related legal services, change of parties administration, deed of postponement, deed of grant, deed of variation, merger of freehold or leasehold title, leasehold supplements, change of name, telegraphic transfer of surplus funds to borrower, local searches for loans over £1 million or if an exceptional amount of work is required to correct a defective title.
Product fees: Payments should not be made at application stage. Bank of Ireland UK will deduct the fee from the loan amount upon completion or add it to the loan amount.
Interest Only Mortgages

If not Sale of the mortgaged property, all repayment strategies must be held in the UK and the benefits must be held, valued and paid in GBP.

 

For help with key terms, please see the Definitions tab.

A 'RECEIVER OF RENT' MAY BE APPOINTED AND/OR THE PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

Definitions

Definitions

Approval in Principle (AIP): An AIP indicates how much you could borrow based on the information you have provided, it performs various criteria and credit reference agency checks, and gives a conditional decision to lend based on its findings.

APRC: Annual Percentage Rate of Charge - this shows the overall cost of borrowing, taking into account the term, interest rate and other costs.

Fee assisted: Fee assisted products have a free standard valuation and if you're remortgaging, where stated, free standard legal work via the lender's nominated solicitors to help you keep the upfront costs down. You can upgrade to a full HomeBuyer survey for an additional fee - please call for more details.

Higher Lending Charge: A fee which may be charged if the amount borrowed is more than a given percentage of the value of the property. The lender will use the fee for an insurance policy to protect them against financial loss in the event of a borrower not meeting their mortgage payments. The fee is usually payable in full up front. You may be liable for any mortgage shortfall debt if after possession the sale proceeds are not enough to repay your outstanding debt. Choose a Post Office Money mortgage and the Higher Lending Charge is paid by the lender for mortgages above 75% LTV. No Higher Lending Charge is payable for mortgages up to 75% LTV. See the Lending Criteria for more information.

Loan to Value (LTV): It’s the amount of mortgage expressed as a percentage of the value of the property or purchase price, whichever is lower. For example, a mortgage of £80,000 on a purchase price of £100,000 would be 80% LTV. If the valuation of the property is lower than the price you've agreed, the LTV will be based on the valuation.

No product fee:  There is no product fee to pay. This is ideal if you do not want to pay a product fee or add one to your mortgage.

Overall cost for comparison: The total cost of a loan, including interest charges and product fees, shown as a percentage rate. The calculation assumes that you keep the mortgage for the full term. APRC is the industry standard calculation and allows you to directly compare mortgages from all lenders.

Product fee: When you apply for your mortgage, lenders may charge you a fee for providing the loan. Our standard products may include a product fee (please refer to individual products for fee details), which can be paid upon completion of your mortgage or added to the loan.

Standard legal fees: If your mortgage states that standard legal fees are paid by the lender, the lender will pay the fees for remortgages via their nominated solicitors. Terms and conditions apply, additional legal work may incur additional fees, please refer to the General Lending Criteria for full details.

Standard valuation: Also known as a lender's valuation, this is a basic assessment that’s carried out on a property to establish its condition and value. This is done so a lender can decide whether to lend on the property.

 

0800: All calls to 0800 numbers are free of charge whether made from a landline or mobile phone. Calls may be monitored or recorded for training and compliance purposes.

Small print

Please note our online mortgage application is only compatible with Internet Explorer 9+, Google Chrome 34+, Firefox 28+, Safari 5 and 7 web browsers and is not optimised for mobile phones.

Subject to status and lending criteria. Written illustrations available upon request. Borrowers must be aged 21 or over.

Post Office Limited is an appointed representative of Bank of Ireland (UK) plc which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, FRN 512956. You can check this on the Financial Services Register by visiting the website www.fca.org.uk/register or by contacting the Financial Conduct Authority (FCA) on 0800 111 6768. Bank of Ireland UK is a trading name of Bank of Ireland (UK) plc which is registered in England & Wales (No. 07022885). Registered Office: Bow Bells House, 1 Bread Street, London, EC4M 9BE. Post Office Limited is registered in England and Wales (No. 2154540). Registered Office: Finsbury Dials, 20 Finsbury Street, London, EC2Y 9AQ. Post Office Money and the Post Office Money logo are registered trademarks of Post Office Limited.