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Professional Mortgage

What do you want to know about our Professional Mortgage?

A mortgage this flexible — and with so many added benefits — is something quite a lot of people will want to know more about. Here are answers to some of the questions you might have:

Do I qualify?

To qualify for a Scottish Widows Bank Professional Mortgage you must be:

  • Over 21 years of age
  • A fully qualified, practicing and registered (see below) accountant, actuary, barrister, dentist, engineer, medical doctor, optometrist, pharmacist, solicitor, teacher, or vet.
  • Professionals must be registered with the appropriate governing body as listed below:

    Accountants

    • Institute of Chartered Accountants England & Wales
    • Institute of Chartered Accountants Scotland
    • Chartered Institute of Management Accountants
    • Association of Chartered Certified Accountants 
    • Chartered Institute of Public Finance and Accountancy

    Actuaries

    • The Institute and Faculty of Actuaries (IFoA)

    Barristers

    • The Bar Council

    Dentists

    • General Dental Council

    Engineers

    • Engineering Council (limited to members qualified as IEng or CEng)

    Medical Doctors

    • General Medical Council

    Optometrists

    • The General Optical Council

    Pharmacists

    • General Pharmaceutical Council (GPhC)

    Solicitors

    • Law Society of Scotland
    • Law Society of England & Wales 
    • Law Society of Northern Ireland

    Teachers

    • England – must have Qualified Teacher Status (QTS)
    • Wales – General Teaching Council for Wales
    • Scotland – General Teaching Council for Scotland
    • Northern Ireland – General Teaching Council for Northern Ireland

    Vets

    • Royal College of Veterinary Surgeons
  • We'll also consider trainee accountants, trainee actuaries and trainee solicitors.

Professionals employed in a role outwith their qualification will be considered on an individual basis.  For example, a fully qualified accountant working as a senior finance manager would be considered for a Professional Mortgage. And being self-employed is no barrier to having your application accepted — in fact, many self-employed professionals find the flexibility of this mortgage ideally suited to their needs.

How much can I borrow?

To find out how much you may be able to borrow refer to the affordability calculator, or speak to your mortgage adviser.

What can I use a Scottish Widows Bank mortgage for?

The property you buy must be located within the UK and loans can only be used to buy your main residential home, for purposes relating to this home, or for the purchase of a second home.

90% borrowing — how is this made up?

You can borrow up to 90% of the purchase price or valuation of the property, whichever is the lower including costs.

For remortgages with a capital raise the maximum is 85%.

For new build properties and properties that have been converted in the last two years the maximum you can borrow is 80%.

For interest only borrowing the maximum is 75%.

The following restrictions apply for borrowing above £750,000:

  • £750,000.01 to £1m 85%
  • £1,000,000.01 to £2m 80%
  • £2,000,000.01 to £5m 70%
  • £5,000,000.01 and above 50%

How long will I have to pay it off?

How long you take to pay back your mortgage is called the 'term'. The term of your Professional Mortgage will depend on your circumstances and what you can afford to pay each month.

  • Minimum term 5 years
  • Maximum term 40 years, or to age 80 if less
  • If the mortgage term extends beyond the lower of either a maximum working age of 70 or anticipated retirement age, we'll assess affordability on both current sustainable income and expected retirement income.

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

How can offsetting save me money?

If you choose our Professional 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.

There are two offset benefits you can choose from:

  • Reduced term - this can allow you to pay off your mortgage early
  • Reduced monthly payment - the term of your mortgage remains unchanged and your normal monthly mortgage payment is reduced instead.

Whichever option you choose, you could save thousands of pounds in interest payments. Try our offset calculator to see how you could benefit.

And by reducing the interest on your mortgage your savings are, in effect, earning mortgage rate interest.

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

 

What interest rates are available?

You could have a fixed rate, variable rate or a combination of both.

We’ll arrange a free property assessment for our use. We may instruct a surveyor to inspect the property or use an automated valuation.

Our variable interest rates allow you to regularly overpay. This can reduce the balance of your mortgage more quickly, meaning you'll pay less interest and may even pay off your mortgage sooner.

With a variable rate mortgage, you also have the flexibility to use our ‘Switch & Fix’ option. This allows you to switch, without penalty, to a new fixed rate, subject to assessment. The applicable new fixed rate booking fee would be payable, but no Early Repayment Charge would be applied for early withdrawal from the variable rate product.

Or you could benefit from the advantages of both if you have a fixed rate for part of your mortgage and a variable for the rest.

What are the repayment methods?

Your Professional Mortgage could be repayment, interest only or part repayment, part interest only.

With a repayment mortgage you will gradually pay off the amount you borrowed plus interest, over the term of the mortgage.

With an interest only mortgage you only make payments to cover the interest on the amount you borrow. The full amount must be paid off in a lump sum at the end of the mortgage term. Please read the next question below called "Which repayment plans can I use for an interest only mortgage with Scottish Widows Bank?" for more information.

Please note that interest only borrowing is available up to a maximum Loan to Value (LTV) of 75%, based on the lower of the purchase price or valuation. Where borrowing exceeds 75% LTV the whole loan must be on a repayment basis.

Can I take a payment holiday?

No, we don't offer payment holidays.

How do I pay my Scottish Widows Bank mortgage?

Your mortgage payment will be collected by Direct Debit on the first working day of every month. The Direct Debit must be set up from a personal account in your name. We do not accept payments from business or third party accounts.

Which repayment plans can I use for an interest only mortgage with Scottish Widows Bank?

 In order to repay the capital, a lump sum is required at the end of the mortgage term. It is your responsibility to make sure you have a plan in place that will repay the amount you owe at the end of the term.

An interest-only mortgage is a higher risk than a repayment mortgage, as in most cases there’s no guarantee that you’ll be in a position to fully repay the capital amount you owe at the end of the term.

When you apply for an interest-only mortgage, we’ll ask you to provide copies of evidence that an appropriate plan is in place to repay the debt. We will ask to see the evidence regularly for review throughout the life of your mortgage until it is repaid.

 

Sale of property to be mortgaged, if it’s a main residence

Criteria:

Sole applicants must have a minimum income of £100,000 pa. For joint applications, one of the applicants must have  a minimum income of £100,000 pa, or the joint applicants must have a minimum combined income of £150,000 pa.

The income requirement is calculated on the total of basic, overtime, bonus and commission for employed applicants, or the latest year’s income for self employed applicants.

Maximum term of mortgage to state pension age or anticipated retirement age (no lending into retirement).

Up to 50% LTV can be on interest only. Borrowing over 50% and up to 75% LTV must be on a repayment basis.

 

Evidence required:

No additional evidence is required. We’ll use the valuation carried out on application to calculate the equity available.

Assessment method:

There must be at least £200,000 equity in the property. We can use the full equity amount to support interest only lending.

The property must be sold at the end of the term to repay the outstanding loan.

Sale of property to be mortgaged, if it’s a second home

Criteria:

Sole applicants must have a minimum income of £100,000 pa. For joint applications, one of the applicants must have  a minimum income of £100,000 pa, or the joint applicants must have a minimum combined income of £150,000 pa.

The income requirement is calculated on the total of basic, overtime, bonus and commission for employed applicants, or the latest year’s income for self employed applicants.

Maximum term of mortgage is normally to state pension age or anticipated retirement age (no lending into retirement), although longer terms can be considered.

Evidence required:

No additional evidence is required. We’ll use the valuation carried out on application to calculate the equity available.

Assessment method:

No minimum equity requirement. We can use the full equity amount to support interest only lending.

The property must be sold at the end of the term to repay the outstanding loan.

Bonus

Criteria:

Sole applicants must have a minimum income of £100,000 pa. For joint applications, one of the applicants must have  a minimum income of £100,000 pa, or the joint applicants must have a minimum combined income of £150,000 pa.

The income requirement is calculated on the total of basic, overtime, bonus and commission for employed applicants, or the latest year’s income for self employed applicants.

Maximum term of mortgage to state pension age or anticipated retirement age (no lending into retirement). We’ll allow the term to run up to term plus 11 months past the lower of the two.

Evidence required:

If received monthly, the latest three payslips.

If received quarterly, the latest four payslips showing bonus payments

If received half yearly the latest two payslips showing bonus payments.

If received annually, the latest two years payslips showing bonus payments.

An average value should be calculated and used.

Payslips must show the applicant’s name, employer, pay date and gross bonus amount.

Assessment method:

An annual bonus figure is calculated from the payslips provided as evidence. Where bonus is paid annually, the average of the bonus received in the last two years is used. 30% of this bonus figure is then multiplied by the term of the mortgage required for the amount of interest only lending available.

There’s an expectation that the applicant will make periodic lump sum repayments to reduce the amount outstanding during their interest only mortgage. Early Repayment Charges would apply as normal where any overpayment concession is exceeded.

Where any bonus is to be used as a repayment plan, no bonus income earned by any applicant to the mortgage will be used in our affordability assessment.
Cash

Criteria:

Sole applicants must have a minimum income of £100,000 pa. For joint applications, one of the applicants must have  a minimum income of £100,000 pa, or the joint applicants must have a minimum combined income of £150,000 pa.

The income requirement is calculated on the total of basic, overtime, bonus and commission for employed applicants, or the latest year’s income for self employed applicants.

Cash must be held in £ sterling.

Maximum term of mortgage to state pension age or anticipated retirement age (no lending into retirement).

Evidence required:

Copy of statement dated within the last month, and a previous statement showing the cash amount being held for a minimum of three consecutive months. Savings can be spread across a number of different accounts.

Assessment method:

If a minimum of £50,000 has been held in savings or current account for a minimum of three consecutive months, 100% of the current cash balance can be used to support interest only lending. If statements show a fluctuating cash balance then the lowest balance will be used.

If savings are also being used as source of deposit, evidence of an amount sufficient for both the repayment plan and deposit must be provided.
Pension

Criteria:

Must be a UK pension.

The term of any interest only lending must not exceed the lower of state pension age or anticipated retirement age. We’ll allow the term to run up to term plus 11 months past the lower of the two.

Evidence required:

Copy of latest pension statement dated within the last 12 months.

Assessment method:

The pension must have a minimum projected total fund value of £400,000, of which a maximum 15% of this amount will be used to support interest only lending. Where a projected total fund value does not show on the pension statement, such as on a final salary scheme, if the projected lump sum is at least £100,000 up to 60% of the projected lump sum value can be used. Where a statement gives a range of projected values the middle of three figures or the lower of two will be used.

Pension contributions should be declared under the ‘Total monthly payment towards repayment plans’, and will be used in our affordability calculations. The aplicant must understand the need to maintain pension contributions.
Endowment

Criteria:

Must be a UK policy.

Both with profits and unitised plans permitted.

Evidence required:

Copy of the latest projection statement dated within the last 12 months.

Assessment method:

Endowment companies will present three growth rates with the middle projection being the most likely outcome.

We allow up to 100% of the projected amount using the middle projection figure (usually at 6%).
UK based Stocks & Shares ISAs, Unit Trusts, OEICs or Investment Bonds

Criteria:

Only UK based investments quoted within the FTSE index and held in sterling are acceptable.

Evidence required:

Copy of the latest statement dated within the last 12 months.

Assessment method:

We’ll compare the value of the asset with the amount of interest only lending required, taking into account the remaining term of the mortgage and future market volatility.

The valuation we assign to the investment is 80% of the current value, which must be greater than £50,000*.

*For existing customers the current value minimum threshold does not apply if the total amount of interest only borrowing is not being increased.

UK based stocks & shares

Criteria:

Only shares quoted within the FTSE index and held in sterling are acceptable.

Evidence required:

Copy of share certificates, nominee account statement or confirmation from a recognised stock broker containing evidence of share holdings, together with their valuation. Must be dated within the last 12 months.

Assessment method:

As above for UK based Stocks & Shares ISAs, Unit Trusts, OICs and Investment Bonds.

Sale of second home/Buy to Let (UK)

Criteria:

Due to valuation and verification requirements this is restrictedto properties within the UK

Evidence required:

Completed ‘Interest Only Other Residential Property’ form.

If the mortgage lender is outside Lloyds Banking Group we need a copy of the latest mortgage statement dated within the last 12 months.

Assessment method:

We’ll compare the value of the asset with the amount of interest only lending required, taking into account the remaining term of the mortgage and future market volatility.

The valuation we assign to the investment is 80% of the current value, which must be greater than £50,000*.

*For existing customers the current value minimum threshold does not apply if the total amount of interest only borrowing is not being increased.

Sale of another residential property not yet purchased

Criteria:

Due to valuation and verification requirements this is restrictedto properties within the UK

Evidence required:

We’ll need property details, acting solicitor to confirm intended ownership of the second property and details of any loans to be secured against this property. We may carry out a property valuation and land registry search.

Assessment method:

We’ll confirm the intended ownership of the second property prior to producing a mortgage offer.

Current equity within the property must be over £50,000. We’ll use 80% of the current equity available in the property to support interest only lending. Note there must be at least £50,000* equity available in each individual property being used to support interest only lending.

*For existing customers the current value minimum threshold does not apply if the total amount of interest only borrowing is not being increased.

You should review your plan(s) regularly during the term of the mortgage to make sure it is on track to repay the outstanding balance. Periodically, we’ll ask you to provide evidence of the repayment plan(s). If you are unable to satisfy us that the repayment plan(s) remains on track to repay the outstanding balance on the mortgage, we may ask you to transfer some or all of the mortgage onto a capital and interest repayment basis.

Will I be charged for early repayment?

Depending on your interest rate — fixed, variable or a combination of both — there may be a charge if the early repayment happens within a fixed or variable rate period.

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.

What remortgage packages are available?

Scottish Widows Bank will pay for the valuation, and legal services when applicants use our solicitors, subject to the following criteria.

We’ll arrange a free property assessment for our use. We may instruct a surveyor to inspect the property or use an automated valuation.

We will pay our solicitors to carry out the legal work involved in the remortgage. For any additional services, such as property title transfer or registration of properties in England and Wales where the property requires first registration in HM land registry, our solicitors will contact the applicant(s) to arrange payment.  We will not be able to give legal, financial or tax advice on the remortgage, and recommend that applicants contact their own legal or financial adviser if they require such advice. If the property is in Northern Ireland, or where applicants use their own solicitor instead of ours, we'll offer £300 cashback.

The remortgage package is not available if there's not currently a mortgage on the property. One of the applicants must have owned the property for at least six months prior to the application.

What types of valuation do you offer?

Level 1: Valuation

This is a very brief report on the property and its market value.

This report is just for our purposes but you will be sent a copy. It’s based on a limited inspection of the readily visible and accessible parts of the property.

This level of report may not mention matters that could affect a decision to buy.

Level 2: Survey and valuation

The survey is for you and we don’t receive a copy. We only receive and make our lending decision on the valuation.

The survey gives guidance on defects and other issues that may affect the property.

The surveyor will send the appropriate terms and conditions for you to read, sign and return.

Level 3: Building survey

The building survey is for you and we don’t receive a copy. We only receive and make our lending decision on the valuation.

The building survey is a detailed report on the property, which can be tailored to fit your requirements.

The surveyor will send the appropriate terms and conditions for you to read, sign and return.

If you choose a Level 2 Survey and valuation or Level 3 Building survey, our surveyors will send separate Terms and Conditions that must be signed and returned to the surveyor before the survey can be carried out. These types of survey include a Standard Mortgage Valuation which will take place at the same time.


What's included?

 

Level 1

Level 2

Level 3

Exterior inspection

Brief

General

Detailed

Inspection of concealed parts

No

No

Yes. Level of detail by arrangement with surveyor.

Evidence of major problems e.g. structural movement

Yes

Yes

Yes

Evidence of major defects

Yes

Yes

Yes

Roof covering

Yes, from ground level only.

Yes. Pitched roofs from ground level and with binoculars. Flat roofs if visible from within property and using a ladder up to 3m height.

Yes. Level of detail by arrangement with surveyor.

Drain inspection/test

No

Yes, accessible drain covers are lifted.

Yes. Level of detail by arrangement with surveyor.

Internal inspection

Brief

General

Detailed

Damp tests

Yes. Limited tests in accessible areas.

Yes. Damp readings taken to accessible areas.

Yes. Damp readings taken to accessible areas.

Carpets moved

No

No

Yes. Level of detail by arrangement with surveyor.

Furniture moved

No

Yes. Heavy furniture not moved.

Yes. Heavy furniture not moved.

Roof space inspected

No

Yes. Where further investigations are required. Limited inspection using loft access point.

Yes. With reasonable access

Sub-floor space inspected

No

Yes. Limited inspection with reasonable access.

Yes. Level of detail by arrangement with surveyor.

Doors/window operation checked

No

Yes. Sample only, if not locked or painted shut.

Yes. Level of detail by arrangement with surveyor.

Visual inspection of services, such as electrical equipment and central heating

Yes

Yes

Yes

Testing of services, such as electrical equipment and central heating

No

No. Taps will be operated individually, WCs flushed.

Yes. Level of detail by arrangement with surveyor.

Report

General

General

Detailed

Identify construction

Yes

Yes

Yes

Detailed analysis of construction

No

No

Yes

Local issues e.g. mining

Yes

Yes

Yes

Other factors e.g. legal matters

Yes

Yes

Yes

Advice on urgency of repairs

No

Yes

Yes

Valuation advice

Yes

Yes

Yes. By arrangement with surveyor.

Insurance valuation

No. Subject to lender requirements.

Yes

Yes. By arrangement with surveyor.

How much will the valuation cost?

Once we’ve instructed the surveyor to carry out a valuation report we’ll contact you to arrange payment of any applicable fee before a date is arranged to visit the property.

 

Will security be required?

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.

Is Internet Banking available?

Yes, you can view your Professional 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 Professional Mortgage.
  • Access your Offset Saver Account

And it's easy to register too — just complete the 'Internet Banking' question in your Professional Mortgage application form. Alternatively, please call 0345 845 0829 to register for this service. Our opening hours are 8am to 6pm Monday to Friday (Wednesday from 10am). When you call, you'll need your Professional Mortgage account number. We'll also ask you additional questions to verify your identity before setting up your access.

*available for variable rate mortgages only.

What are the charges?

Scottish Widows Bank's charges are detailed in the Mortgage Rates Sheet and the Mortgage Illustration you will receive before you submit your mortgage application.

You can also download a PDF of our Tariff of Charges. If you need further help call us on 0345 845 0829 . Our lines are open 8am to 6pm Monday to Friday (Wednesday from 10am).


YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.