Flexible Mortgage

As the name says, the Scottish Widows Bank Flexible Mortgage is flexible enough to meet the needs of all sorts of people – employed or self-employed. Therefore the qualifying criteria is quite open, you must be:

• Over 21 years of age

Everyone will be looked at on an individual basis, by people who take into account your personal circumstances.

We look at each case individually rather than sticking to any strict formula. And we also take into consideration whether you can afford the monthly repayments. But as a general guideline you could borrow:

• Single applicants - 3.5 times your basic salary.
• Joint applicants - 2.75 times your combined basic annual salaries, or 3.5 times the higher basic annual salary plus the full amount of the lower.
• Self-employed – typically we will lend you 3.5 times your net annual earnings, and it is also likely that we will request some information from your accountant.

Up to 75% of the purchase price or valuation of the property, whichever is the lower including costs (for new build properties/conversion flats the maximum you can borrow is 65% for all other new build properties the maximum is 75%).

This can be made up as follows

• Main Mortgage – this is the main loan account for the purchase/remortgage of your property. It can include any extra money you need at the very beginning.
• Mortgage Reserve Account – an additional drawdown facility which allows you to withdraw and deposit money, within a pre-agreed limit, at Scottish Widows Bank’s standard variable rate.

How long you take to pay back your mortgage is called the 'term'. And this is as flexible as every other aspect of our Flexible Mortgage:

• Minimum term 5 years
• Maximum term 40 years or expected retirement age, whichever is earlier

And with our flexible repayment options you may be able to pay off your mortgage earlier than expected too.

Taking out a Mortgage Reserve Account along with your Flexible Mortgage can provide more flexibility in the way you manage your finances – and let you take payment holidays or reduce your monthly payments. Setting one up is easy to do.

If your main mortgage is less than the maximum amount we allow you to borrow you can apply for a Mortgage Reserve Account. This can have any limit you choose, as long as you don’t go over your agreed maximum.

For example, if we agreed to let you borrow £150,000 but you only needed a main mortgage of £130,000, you can apply for a Mortgage Reserve Account with a limit of up to £20,000.

You’ll have the freedom to withdraw and deposit money as you choose – with a £100 minimum – provided you keep within your agreed limit. Interest will be charged at Scottish Widows Bank’s standard variable rate.

If you choose our Flexible Mortgage's offset facility a savings account is set up alongside your mortgage. Any money paid into that account is 'offset' against your mortgage - so, if you have a £200,000 mortgage and £30,000 savings, you will pay interest on only £170,000 of the mortgage.

This could save you thousands of pounds in interest and allow you to pay off your mortgage earlier. And by reducing the interest on your mortgage your savings are, in effect, earning mortgage rate interest – without attracting any tax.

For more information on offsetting take a look at How Offset works.

No, you can choose a fixed rate, variable rate or a combination of both.

With a fixed rate you have the reassurance of knowing that your monthly repayments will stay the same whatever happens to interest rates. And this remains throughout the entire fixed rate period.

You may prefer a variable interest rate which allows you to regularly overpay. This can reduce the balance of your mortgage more quickly, meaning you’ll pay less interest and perhaps even pay off your mortgage sooner.

Or you could benefit from the advantages of both and choose a fixed rate for part of your mortgage and a variable for the rest. It’s your choice.

Mortgage repayment payment holidays and reduced monthly payments will be considered – but only if a Mortgage Reserve Account is in place.

If you are taking a repayment holiday, your normal monthly mortgage payments will be collected from this account instead of your bank or building society. This means that the balance on your Mortgage Reserve Account will increase and interest will be charged on that amount.

You have a choice of repayment options with our Flexible Mortgage - repayment, interest only and part repayment, part interest only.

If you choose the repayment option you will gradually pay off the amount you borrowed plus interest, over the life of the mortgage.

With an interest only mortgage you only make payments to cover the interest on the amount you borrow from Scottish Widows Bank. The original mortgage amount must be paid off in a lump sum at the end of the mortgage period. In order to build up this lump sum you will need to make separate payments into a savings plan.

Whatever repayment method you choose it is a sensible idea to take out Life Cover. This can repay the amount outstanding on your mortgage should the worst happen, ensuring that your family does not lose their home too.

Depending on the interest rate you choose – fixed rate, variable rate or a combination of both – there may be a charge if the early repayment happens within a fixed or discounted rate period. For more detailed examples check out the current Interest Rates.

If you have a fixed rate, up to 10% of the loan balance may be paid once a year by cheque without any early repayment charge.

If you choose our Flexible Mortgage to remortgage your home and are borrowing £750,000, or less we can offer you a choice of incentives. This can be either £300 cashback on completion or our free Remortgage Package. If you are borrowing more than £750,000 you will receive £300 cashback on completion.

If you choose the Remortgage Package completion must be handled by our solicitors. It includes legal fees, valuation and covers the costs normally charged by solicitors for their work on our behalf.

Additional services such as a transfer of title to the property, or first registration of the property in HM Land Registry are not included - nor is this offer available in Northern Ireland.

Our solicitors will not be able to give you legal, financial or tax advice on your remortgage. We recommend that you contact your own legal or financial adviser should you require such advice.

If you are purchasing a property we have negotiated a very competitive fee structure with our surveyors – detailed in the table below.

If you are remortgaging – up to £300,000 and 70% loan to value – Scottish Widows Bank will arrange a valuation and cover the cost. This applies to properties with a maximum value of £1,000,000.

Scottish Widows Bank requires 'first legal charge' over residential properties for all borrowing – this is Standard Security in Scotland.

A legal charge is a formal document that gives your lender certain repossession rights if you do not meet the terms of your mortgage contract. The first legal charge is given to the lender that gives you your main mortgage – which in this case would be Scottish Widows Bank.

Yes, you can view your Flexible Mortgage using our Internet Banking service. Internet Banking allows you to:

• Check your mortgage balance.
• View details of recent transactions.
• Make regular overpayments* towards your Flexible Mortgage

And it’s easy to register too - just complete the ‘Internet Banking’ question in your Flexible Mortgage application form. Alternatively, please call 0845 757 3444 to register for this service. Our opening hours are 8am to 6pm Monday to Friday (Wednesday from10am). When you call, you'll need your Flexible Mortgage account number. We'll also ask you additional questions to verify your identity before setting up your access.

*available for variable, tracker and stepped discount mortgages only.

Scottish Widows Bank's charges are competitive and in line with the industry norm. They are detailed in the Mortgage Rates Sheet and the Key Facts Illustration you will receive before you submit your mortgage application.

You can also download a PDF of our Tariff of Charges (pdf 68k). And if you need further help call us on 0845 845 0829 (calls charged at local rates).