Residential mortgages

BBR is the rate of interest that the Bank of England pays on reserve balances held by commercial banks and building societies. It’s set by the Bank of England’s Monetary Policy Committee. Visit the Bank of England website for more information and details of current and historic rates.

Where the rate of interest we charge is variable it will be set as a margin above BBR. Whenever BBR changes we’ll recalculate the rate of interest you pay by taking BBR and adding the margin to it. The margin we add, which may change during the mortgage term depending on the product you choose, will be set out in section 4 of your mortgage offer.

Your monthly payment will change from the second due date after the change in the rate of interest takes effect (or where the due date falls on the same day that a change in the rate of interest takes effect, the first due date after the change).

All of our BBR tracker products have a floor. This means that if BBR were to fall to 0.00% or less the rate payable will be 0.00% plus the agreed set percentage above BBR. This means that the rate payable will never go below 0.00% plus the additional percentage rate of the tracker product.

For example:

If BBR changed on the 14th of January then the rate of interest you pay would change on the 14th January. The date your monthly payment changes to reflect the change in the rate of interest depends on when you make your monthly payments, for example:

• if you paid your monthly payment on the 10th of each month then your monthly payment would change on 10th March.
• if you paid your monthly payment on the 20th of each month then your monthly payment would change on 20th February.
• if you paid your monthly payments on the 14th of each month then your monthly payment would change on the 14th February.

The mortgage illustration that your broker will give you will illustrate how an increase in the rate of interest will affect your monthly payment.

If you repay all or part of your mortgage early you may need to pay an early repayment charge. Details of any early repayment charges will be set out in the mortgage illustration and mortgage offer. The early repayment charge will be a percentage of the amount repaid and the mortgage illustration and mortgage offer will explain the amount of that percentage, the period it is payable for and give an example of how much would be payable on the amount repaid.

Our mortgages are for a minimum of five years and maximum of 30 years.

Repayment option

If you’ have chosen the a repayment option, you pay off some of the amount borrowed every month together with a payment of interest charged on your mortgage. This means that your mortgage balance will reduce every month and by the end of the mortgage term your loan will be repaid.

Interest only option

If your mortgage is interest only, your monthly payment only covers a payment of interest charged on your mortgage. At the end of your mortgage term, you’ll still owe the amount you borrowed, and will need to repay this as a lump sum. It’s important that you have a plan in place to repay the amount borrowed on an interest only basis at the end of the mortgage term. You should check regularly throughout the mortgage term that the performance of your plan is sufficient to be able to repay the amount you’ve borrowed at the end of the mortgage term.

If you don’t keep to the terms of the mortgage or make payments on a day other than the 1st of each month then if:

• You’ve chosen a repayment option there’s likely to be a balance outstanding at the end of the mortgage term that you’ll need to pay as a lump sum payment, or
• If you’ve chosen an interest only option the amount you have to repay at the end of the mortgage term is likely to be more than you originally borrowed.

Remember, if you're concerned that you'll be unable to meet your mortgage repayments now or in the near future, please ensure you call us as soon as possible on 0800 781 8558.

For details of the fees and charges that may apply during the life of your mortgage read our Tariff of Mortgage Charges booklet. In addition you may need to pay a product fee, the amount of which will vary depending on the product you choose, the amount of this fee will be included in section 8 of the mortgage illustration and mortgage offer.

It’s important to remember that your adviser may charge you for advising you on your mortgage. Please ensure that you check this with them and confirm what their charges will be.

Should you wish to, you’re able to make lump sum or regular overpayments on your mortgage. If you choose to do this an early repayment charge may apply if this payment is made within the period that early repayment charges are applicable.

If you do wish to make an early repayment, you’ll need to confirm the following to us:

• if you’re making a payment to repay the mortgage either fully or partially;
• that you wish us to use that payment to reduce the balance on which we charge interest.

If we don’t receive the information above, the overpayments will not reduce the balance on which we charge interest or cause a change to your monthly payment.

We’re able to lend on properties in England, Wales and selected postcodes in Scotland, subject to certain restrictions on the types of properties that we’ll lend on. Your broker will be able to provide you with further information on these restrictions.

To help us confirm whether properties are adequate security for the mortgage, a property valuation is required for all cases.

We obtain valuations from a valuer that is listed on our panel of approved independent surveyors and valuers. Whilst we arrange the valuation, it’s important to remember you’ll be responsible for paying the costs of this. Your adviser will confirm the full details of the valuation costs for you.

The valuer will be able to provide either a standard report or a RICS Homebuyers Report, depending on what you ask for. The valuer is not our agent for the purposes of any valuation or report and we accept no responsibility for the contents of any valuation or report, whether a standard report or a RICS Homebuyers Report.

Standard report

This is a report that the valuer carries out for our benefit only to confirm that the property is good security for the amount of loan that you asked for. The report provides basic information about the property and its condition.

Although the report is prepared for us, you’ll receive a copy for your information as a courtesy only. It’s important that you don’t rely on this report as it has not been prepared for you and therefore will not provide you with the detail you may need.

If you’re purchasing a property, it’s particularly important that you’re fully aware of the condition of the property and understand if any repairs are required before you buy. Once you’ve purchased it, you have to maintain the property in good repair as a condition of the mortgage and this can be expensive if major repairs are required. If you need more specific information on the condition of the property please obtain an independent valuation or seek advice before you proceed with the purchase.

The standard report is not prepared for you and the valuer will not accept any responsibility to you for the standard report.

RICS Homebuyers Report

This is a detailed report on the property and will highlight if there are any defects or repairs required.

This type of report may be particularly important to you when you’re buying a property, as the valuer will carry out a full inspection and comment on other matters that may help you decide whether to proceed with the purchase.

The report is prepared for you by the valuer, but the valuer will also include an assessment of the property for mortgage purposes. This mortgage assessment is given to us to confirm that the property is suitable for the mortgage. You’ll receive a full copy of the report.

The RICS Homebuyers Report is prepared for you and any claim you may have in relation to that report should be made against the valuer, not us.

For the purchase or remortgage of a property, we’ll instruct a solicitor or other conveyancer to act on our behalf, ensuring that the property will be satisfactory security for our loan and that we have a charge over it.

We’ll normally instruct the same conveyancer who is acting for you, providing that they’re on our conveyancer panel. If you wish to instruct a conveyancer who does not feature on our conveyancer panels, we’ll instruct a conveyancer from these panels to act on our behalf.

It’s important to remember that you’ll be responsible for all the legal fees and disbursements including the fees of our conveyancer, where you’ve instructed a different conveyancer to us.

We’re unable to lend to you unless you’re resident in the UK and our assessment of your ability to repay the mortgage will only be on income you receive in £’s sterling and assets you hold in £’s sterling.

As a condition of your mortgage, you must ensure that adequate insurance to cover loss and damage to the property is maintained throughout the mortgage term. You don’t need to buy this insurance through Precise.

Your mortgage payments are not automatically protected in the event of accident, sickness or unemployment. In view of this, you may wish to consider protecting yourself and your family against the potential loss of your income. If a situation arises where you’re unable to work and as such struggle to meet your mortgage repayments, this could lead to the risk of you losing your home. You may also wish to consider life insurance to help ensure mortgage repayments in the event of your death.

Your broker may be able to help you arrange payment protection or life insurance but it’s not a condition of your mortgage that you have these policies. We’re unable to advise you on the suitability of any arrangements you may make, whether privately or through your broker.

If you experience difficulty meeting your mortgage payments you can contact us by:

• Writing to us at PO Box 6075 Wolverhampton WV10 6TD
• Calling us on 0800 781 8558

We have a team of experienced staff available to provide you with information and support. You can also find useful information on the Money Advice Service website at moneyadviceservice.org.uk or by calling 0300 500 5000.

Where you don't make your monthly payments or breach the terms of your mortgage in any way:

• There may be additional costs for you where we have to carry out further work. Information regarding our fees and charges, and our right to change them can be found in our Tariff of Mortgage Charges and the General Mortgage Conditions - England and Wales version or the General Mortgage Conditions - Scotland version.
• Additionally, you’ll have to pay any costs we pay for insurance and to third parties (e.g. solicitors, asset managers, receivers) that we may instruct to recover any money owed to us or protect our interest in the property.
• We may also pay, on your behalf, any costs and charges associated with the property where you’ve failed to, and we reasonably consider it necessary to do so to protect our interest in the property. We’ll add these costs and charges to the amount you owe and which you have to repay to us.
• If you fail to make your monthly payments then this information will be passed to credit reference agencies, which may impact on your ability to take out further loans.
• As a last resort, your property may be repossessed if you do not keep up with payments.
• We may also appoint a ‘receiver’ to collect rent, manage and potentially sell the property. The receiver acts as your agent and therefore we’re not legally responsible for their actions.