Interest Only - Sale of the security property
The sale of the security property is an acceptable repayment vehicle where:
- The applicant intends to sell their home (the mortgage is secured on) to repay the capital at the end of the mortgage term.
- The interest only mortgage is secured on the property the applicant plans to sell.
- The application meets the criteria below (applies to residential applications only excluding Rate Switches).
- Where the applicant is applying for a residential Rate Switch the ‘sale of the security property’ can be used as a repayment vehicle. These applications will not be subject to any criteria checks.
- The applicant has read and signed the ‘Sale of the security property – Customer Declaration’ – see below.
Where the repayment vehicle is not ‘sale of the security property’ please refer to Interest Only Criteria for more information as different criteria applies.
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Residential Interest Only Criteria – Sale of the security property |
Additional information |
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Maximum LTV |
60% |
The maximum LTV on interest only. This is based on the loan amount excluding any fees. A further 15% may be taken on a repayment basis taking the overall LTV up to maximum of 75%. |
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Minimum Equity |
£300k |
The minimum equity remaining in the property at time of application, subject to valuation. This is based on the loan amount excluding any fees. Acceptable examples: Property value £400K with an interest only loan amount of £100K = £300K equity (25% LTV) Property value £700K with an interest only loan amount of £350K and repayment loan amount of £50K = £300k equity (57% LTV) |
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Maximum Term |
30 years |
The maximum term on completion. This also applies to any part of the lending on a repayment basis. The term of the repayment lending cannot exceed the term of the interest only lending. Acceptable examples: 30 year term on interest only and 30 year term on repayment. 30 year term on interest only and 20 year term on repayment. |
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Maximum Age |
70 years |
The maximum age at the end of the term, or the applicant’s anticipated retirement age, whichever is lower. This also applies to any part of the lending on a repayment basis. The term of the repayment lending cannot exceed the term of the interest only lending. |
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Lending into retirement |
No |
Not acceptable where the customer is already retired or the mortgage term will extend beyond the applicant’s anticipated retirement age or their 70th birthday, whichever is lower. This also applies to any part of the lending on a repayment basis. The term of the repayment lending cannot exceed the term of the interest only lending. |
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Minimum Income |
£75k Sole and/or £100k Joint |
Sole applicants - Minimum income required of £75K* Joint applicants – Minimum income required of £75K* for one applicant OR a combined minimum income of £100K for both applicants*. Acceptable examples: Joint – Applicant 1 £75K and Applicant 2 £10K Joint – Applicant 1 £50K and Applicant 2 £60K *Based on the gross amount used for affordability e.g. 100% of Basic Salary, 60% of Overtime. |
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First Time Buyers |
Yes |
Available to first time buyers. |
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Second Homes |
Yes |
Available on a second home where the interest only mortgage is secured on the property the applicant plans to sell. |
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Studio Flats |
No |
Studio flats are not acceptable. |
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Affordable Housing Schemes |
No |
Not available on applications involving Shared Ownership, Shared Equity, Help to Buy and Right to Buy schemes |
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Debt Consolidation |
Only available on a repayment basis |
Any part of the lending being raised for Debt consolidation must be on a repayment basis only. |
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Other |
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Sale of the security property – Customer Declaration
Our Regulator places a significant responsibility on the lender to ensure interest only loans have a credible repayment vehicle. For complex transactions, to support you and the customer we use digital signatures. At TSB we use Adobe Sign for this kind of request and require all applicants named on the mortgage to read and digitally sign a Sale of the security property – Customer Declaration’.
Please read the instructions below before accessing the declaration:
- Complete your details in section 1 and the MSO Case ID and the applicant(s) details in section 2. All applicants named on the application must be included, as all will be required to digitally sign the declaration.
- Click agreement and submit. This will trigger a pop up box ‘Assign to next participants’.
The ‘Assign to next participants’ is where you must capture the applicant(s) email address(es), so they receive the declaration to digitally sign:
- Under participant 2 complete the fields based on applicant 1, including their email address and confirm the email address.
- Under participant 3 complete the fields based on applicant 2, including their email address and confirm the email address.
- Up to 4 applicants can be added.
- Please ensure all email addresses are entered correctly.
- All applicants named on the application must be included, as all will be required to digitally sign the declaration.
- Once completed click ‘Next’.
- Complete your name and email address in the ‘enter your information’ box and click submit.
- You’ll then receive an email from adobesign@adobesign.com. You must select ‘confirm my email address’ or the applicant(s) won’t receive the declaration to digitally sign.
- The declaration will then go to each applicant to digitally sign (one after the other if there is more than one applicant).
- Once signed and submitted, this will return to TSB where we’ll upload the declaration to the application within 24 hours of receipt. A signed copy will also be emailed to you and the applicants.
Printed versions of the Adobe declarations with wet signatures, or any other form of digital signatures are not acceptable.
Click to access the Adobe declaration.
We use Adobe Sign for this kind of request. Adobe will pass the information you provide to us in a secure manner and won’t process it in any other way. Information on how we use your data can be found in our Data Privacy Policy.