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Mortgage Trust Criteria

A summary of our key lending criteria is set out below. For full information, please see our Lending guidelines and submission requirements.

Maximum LTV Loan amount
80% £500,000
70% £1,000,000*

Any fees that may be added to the loan are excluded from the LTV calculations.

*Varied for some products, see product features

Maximum aggregate borrowing

A lending limit of £1,000,000 and no more than 5 properties applies across all our mortgage products.

Applicants

Applications will be considered for a maximum of two individuals in their personal names. No limited company applications.

Purchase applications

We will not consider applications where the applicant is purchasing a property from an associated limited company.

Age

  Minimum Maximum
At application 21 years  
Maturity of loan   80 years

Income

Applicant(s) should have a minimum combined gross annual income of £25,000 per annum.

All income must be evidenced and can include:

  • gross employment income
  • taxable self-employed income

Income from renting property, state benefits, state pensions and investments will not be considered, but may be taken into account when calculating the tax band applicable to the applicant.

Affordability

The gross rental income from the property should equal or exceed the Interest Coverage Ratio as determined by the tax band applicable to an applicant’s income. The tax band applicable to the applicant with the highest income will be used

The tax band and ICR levels are as follows:-

Applicant type Applicant ICR
Basic rate tax payer (20%) 125%
Higher rate tax payers (40%) 140%
Additional rate tax payers (45%) 140%

In addition, all applications will be subject to an assessment of future affordability based on our current understanding of interest rates going forward and rental inflation. We must be satisfied that the applicant(s) are able to withstand increases in mortgage interest rates, cover rental voids and be able to afford the mortgage now and after any fixed/discounted period expires.

Mortgage Trust and Paragon Mortgages are trading styles of Paragon Mortgages (2010) Limited (Registered in England No. 6595834) and Paragon Bank PLC (Registered in England No. 05390593). Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Paragon Bank PLC is registered on the Financial Services Register under the Firm Reference No. 604551. Registered office: 51 Homer Road, Solihull, West Midlands B91 3QJ.