Lending Policy
We consider loans in a range of property sectors, normally within the parameters detailed below.
| commercial investment loans | |||
|---|---|---|---|
| Security Type | Maximum LTV * | Maximum Exit LTV * | Loan Term * |
| Office , Retail and Industrial Investment | 75% | 75% | 5 - 20 years |
* dependent on tenant quality, property location and lease length
| residential investment loans | |||
|---|---|---|---|
| Security Type | Maximum LTV ** | Maximum Exit LTV ** | Loan Term ** |
| Residential investment | 75% | 75% | 5 - 20 years |
** dependent on individual asset value, asset location and borrower experience in residential investment property.
Please note lending terms may be amended or withdrawn without notice.
number of properties
The minimum number of residential investment properties is 10 for individuals and partnerships.
There is no minimum for limited companies or other borrowers. There is no maximum number of properties.
conditional credit lines
Conditional credit lines (forward funding lines) will be considered.
loan term and interest only period
The maximum loan term and the maximum interest only period is 25 years.
rental cover calculation
We will require the gross rental income on the security properties to cover a minimum of 120% of initial loan interest costs for all fixed interest rate and variable interest rate facilities.
lending criteria
borrowers
Personal borrowers must be over 18 years of age with relevant experience in investment property and must not have been previously bankrupt. For corporate borrowers, directors' personal guarantees and a floating charge over company assets will usually be required.
loan amounts
The minimum loan amount is ££250,000.
repayment methods
A range of repayment profiles with bullet repayments on expiry of the loan term are available.
interest rates
Commercial loans are available on interest margins above LIBOR or a range of fixed rates.
Residential loans are available on interest margins above Commercial Tracker (which is set by reference to the Bank of England Base Rate) or a range of fixed rates.
arrangement fees
On Commercial loans and Residential loans a negotiable arrangement fee will be payable upon acceptance of any formal offer of finance. A fixed rate reservation fee will apply if a fixed interest rate is selected.
valuation & legal fees
On all loans, a valuer will be selected by Northern Rock from its panel and the fee will be payable by the applicant.
On Commercial loans, independent solicitors will normally act for Northern Rock on loans to individuals over £500,000, and loans to limited companies over £250,000.
On Residential loans, independent solicitors will also normally act for Northern Rock on loans to individuals over £3M and loans to limited companies over £1.5M.
All legal fees of the applicant and Northern Rock are payable by the applicant.