Your mortgage questions answered
- Who will we lend to?
- What term will we lend over?
- How do you repay the loan?
- Freehold or leasehold?
- What about a valuation?
- How much can you borrow?
- Do we charge a higher lending charge?
- Do we make an early repayment charge on mortgages?
- What properties will we lend on?
All information relates to residential dwellings being used for owner occupation.
Who will we lend to?
Chelsea will lend to anyone who is at least 18 years old (on most mortgages). However you will need to have the right to reside and work in the UK for at least the duration of the mortgage, be employed by a UK based business, be paid in £ sterling, pay
UK tax and be purchasing a property in the UK.
Up to 4 people can be joined in an application although we will only take into account the income from 3 applicants. At least one applicant needs to be working (either employed or self employed) or in receipt of a guaranteed income such as a pension.
You will need to be able to prove your income and your application will be subject to a credit check.
What term will we lend over?
The usual term is 25 years but your loan can be from 5 to 40 years but should end on or before your normal retirement age. In exceptional circumstances we may agree to extend the term up to your
75th birthday if you are in receipt of income which we regard as guaranteed and which we consider to be sufficient to afford the loan. Loans past normal retirement age (where available) are
restricted to not more than 75% of the purchase price or value (whichever is the lower) of the property.
How do you repay the loan?
You can choose between repayment or interest only.
With a repayment mortgage you pay interest plus capital each month until, by the end of the term, your mortgage is repaid.
Alternatively you can make interest only payments. The monthly payments are lower than a repayment mortgage however, the amount you borrow remains outstanding and will have to be repaid at the end of the mortgage term. This may be done, for example, by linking your interest only mortgage to an endowment assurance or personal pension plan. You can also repay the amount borrowed from your own personal resources. It is your responsibility to do this and you should also arrange life assurance to repay the loan in the event of your death.
What properties will we lend on?
We will lend on most properties built using standard construction methods and materials including modern timber framed properties. Chelsea will not lend on studio flats, bedsits or converted basement
flats.
Freehold or leasehold?
Freehold and leasehold houses are acceptable. Flats and maisonettes must be leasehold. The lease must have at least 55 years to run (or 30 years plus mortgage term if longer) at the date your mortgage
is completed. In Scotland properties with freehold tenure are acceptable.
What about a valuation?
A valuation of your property will be required for mortgage purposes. This is so that we can be certain that the value of the property is sufficient for the amount you want to borrow and should
not be relied upon by you when deciding whether to proceed. The valuation fee, which will vary depending on the value of the property, will include a non refundable administration fee of £125
for dealing with your mortgage application. This fee is payable with your mortgage application.
| Valuation Band (up to) | Fee to customer |
|---|---|
| £ 100,000 | £ 240.00 |
| £ 150,000 | £ 274.50 |
| £ 300,000 | £ 345.25 |
| £ 400,000 | £ 423.50 |
| £ 500,000 | £ 487.00 |
| £ 700,000 | £ 590.00 |
| £ 800,000 | £ 663.25 |
| £ 900,000 | £ 722.00 |
| £ 1,100,000 | £ 815.00 |
| £ 1,300,000 | £ 987.50 |
| £ 1,500,000 | £ 1,077.25 |
| £ 2,000,000 | £ 1,332.50 |
| £ 2,500,000 | £ 1,965.00 |
| £ 3,000,000 | £ 2,310.00 |
| over £ 3,000,000 | by arrangement |
How much can you borrow?
The minimum loan is £25,000 although it may be higher depending upon the mortgage product selected. You may borrow to purchase a new property or to replace an existing mortgage from another
lender. When replacing an existing mortgage you may be able to borrow more than your current loan to finance home improvement or to repay other lending. The maximum loan may vary depending on the mortgage product chosen. Please see your Chelsea contact.
How much you can borrow depends upon:
The table below sets out the maximum advance in relation to the purchase price or value of the property.
| Purchase price or valuation | Basic loan | LTV or loan value |
|---|---|---|
| Up to £400,000 | 75% | 90% or £237,500* |
| £400,001 - £600,000 | 75% | 85% or £360,000* |
| £600,001 - £800,000 | 75% | 80% or £510,000* |
| £800,001 - £1million | 75% | 75% or £640,000* |
| £1,000,001 - £2 million | N/A | 65% or £750,000* |
| Over £2 million | N/A | 60% or £2,000,000 ** |
*Maximum loan will be LTV or loan amount, whichever is greater
**Maximum loan for a property with a value/purchase price over £2,000,000 will be the lower of £2,000,000 or 60% LTV.
The amount you can borrow will also depend upon your income as shown below:
| Up to 75% LTV | 75.01% - 85% LTV | ||||||
|---|---|---|---|---|---|---|---|
| Income up to £35,000 | Income over £35,000* | Income up to £35,000 | Income over £35,000* | ||||
| Single | Joint | Single | Joint | Single | Joint | Single | Joint |
| 4 | 4 | 4.5 | 4.5 | 3.75 | 3.75 | 4 | 4 |
*One applicant must earn more than £35,000
Separate income multiples apply to our non conforming (Prospect) range. Please contact your local branch or call 0845 607 6612 for more details.
Do we charge a higher lending charge?
A higher lending charge is only charged where a Chelsea mortgage (with the exception of the Chelsea Prospect Mortgage) is taken out in excess of 90% of the price or value of the property
(whichever is lower). The higher lending charge protects Chelsea by reducing the risk on higher percentage loan to value cases. It does not, however, remove or reduce your responsibility for
payment of the full mortgage balance.
Do we make an early repayment charge on mortgages?
This will depend upon the particular mortgage chosen. Each Chelsea mortgage shown on this website will give full details of early repayment terms.
All mortgage pages must be read in conjunction with the important information (mortgages) page.
