Criteria & Packaging Guide
Our lending criteria at a glance and a comprehensive packaging guide
Everything you need to know
We have two sets of lending criteria at Barclays – residential and buy to let. To make it easier to find what you’re looking for, we’ve listed our criteria details in alphabetical order.
Our lending criteria at a glance and a comprehensive packaging guide
Work out how much we could lend your clients for buying a new home.
Find more information about registering with us, client applications and submitted cases.
Minimum age: 18
Maximum age at the end of the mortgage term should be 70 or retirement age – whichever is sooner. Where the mortgage term would end later than this for any applicant, we’ll consider each application individually. You must provide full details of how any borrowers will fund the mortgage into retirement, or beyond age 70. You’ll need to submit documents to prove affordability for the full mortgage term.
Our underwriters need to see documents that show your client will be able to keep up with their mortgage payments when they’ve retired. You’ll also need to confirm that you’ve discussed affordability in retirement with your client, and that they’re comfortable they’ll be able to meet the mortgage repayments until the end of the mortgage term.
We can consider applications on a repayment or interest-only basis if one or more applicants will be retired (past normal retirement age) or aged over 70 at maturity of the mortgage, either where a younger applicant meets the affordability requirements or where customers can show evidence that they’ll be able to pay the mortgage in retirement.
County Court Judgements (CCJs/defaults)
Adverse credit as detailed below must be declined:
*Includes partially settled defaults which will be referred out to check whether full and final settlement has been made
Applications can be considered where the above is identified but only where documentary evidence of a settled dispute has been provided by the customer.
Over-indebtedness
Where the total unsecured bureau debt (credit cards, overdrafts and loans) is greater than or equal to the gross annual income used in the affordability assessment then the application will be declined. This includes where customers were looking to consolidate the borrowing on to the mortgage.
These standards only apply on drawn balances (unused credit limits are not included). This calculation is automatically applied by the system.
Mortgage or rent arrears
If arrears of more than 1 month have occurred in the past 6 months, and/or 3 months arrears have occurred in the past 2 years, the case is outside lending policy and is to be declined. However, this decision could be changed if there is an acceptable 'technical' reason, or if evidence of a settled dispute is provided and verified by the lender.
If this is the case, please contact our Intermediary Mortgage Experts on 0345 073 3330 * to discuss whether we will be able to assist. Lines are open Monday to Friday 9am-5pm.
Bankruptcy/IVA
It is not acceptable to lend where any applicant is currently bankrupt or subject to a Debt Relief Order (DRO) and/or Individual Voluntary Arrangement (IVA) however, lending can be considered provided any bankruptcy, DRO or IVA was registered more than 6 years ago from the date of submission (and hence no longer appears on the credit reference bureau information).
If your client has a more complex credit history?
You may wish to visit Kensington Mortgages, part of the Barclays Group of Companies. Kensington is one of the UK’s leading specialist mortgage lenders and offer more flexible lending criteria to help people who may not meet typical lending requirements. Learn more.
It is important that we demonstrate that an applicant can reasonably afford to repay their mortgage before we agree to enter into a regulated mortgage contract with them. The use of income multiples alone is not sufficient to assess the maximum amount we'll lend.
Your client’s affordability will also be assessed using information collected in the 'Affording your Mortgage' section of our application. Here, you'll need to detail their regular financial commitments to show that they can afford to make the required monthly repayments.
There are several factors to take into account when assessing your client’s ability to repay their mortgage
Income assessment
This should include the applicant’s actual verified income, net of tax and National Insurance. When making a lending decision or contract variation the underwriters can consider various sources of income (please see the requirements table). The underwriter must consider the variability of the income over time to ensure the mortgage payments remain affordable to the customer. Variable (or non-guaranteed income) must be verified over a sufficient period to inform an assessment of sustainability.
Expenditure assessment
The data captured in the application must take into account committed expenditure (eg credit cards, overdraft, council tax, loans, hire purchase, school fees). Basic essential expenditure and basic quality of living costs will be accounted for in the affordability model.
Monthly mortgage commitment
The monthly repayment must be met from the applicant’s actual or reasonably anticipated income. If the applicant intends to repay from resources other than income, reference to information given by the applicant must be given on the application form.
For repayment mortgages
The monthly repayment used in affordability must be calculated on a capital and interest repayment basis. This should be based on the applicant's current affordability rate or pay rate, whichever is higher. This should also be based on the term of the mortgage or until the applicant is 70, or at the normal retirement of the principal applicant (main income earner), whichever is sooner. For any repayment mortgage term greater than 35 years and up to 40 years, a maximum term of 35 years would be applied for affordability purposes.
For interest only mortgages
The monthly repayment used in affordability must be calculated on a capital and interest repayment basis at the current affordability rate or pay rate, whichever is higher. This should be over an assumed term of 25 years or until the applicant is 70 or at the normal retirement of all applicants, whichever is sooner. Please note, for interest only mortgages the maximum term is 25 years. Where income into retirement from any applicant is required to meet affordability, it is not acceptable to lend on an interest-only basis.
Second or subsequent properties
Second or subsequent properties: commitments in the form of mortgage payments on second properties, other than those on properties confirmed as Buy to Let or Permission to Let properties, will be automatically applied on a standard repayment basis over the outstanding mortgage term at the current affordability rate or current payment amount, whichever is the higher when assessing affordability.
Where a credit limit applies to the existing mortgage borrowing, then it is this figure, including any undrawn monies, that should be used when assessing affordability.
In addition, a fixed-value commitment for each additional mortgaged residential property held is applied by the system to cover all other costs – this only applies to other residential properties, i.e. second residential homes, but not any property confirmed as being on a Buy to Let or Permission to Let basis.
The running costs (e.g. home insurance, utilities and council tax) of any residential unencumbered properties need to be included in the affordability assessment – please manually enter figures on the Commitments screen.
Buy-to-let/ Permission-to-let properties: Commitments in the form of contractual monthly mortgage payments on background buy to let/ permission to let properties will be applied automatically.
Remaining disposable income
The applicant’s 'disposable income' – ie, their monthly income after accounting for regular commitments as detailed above, must be sufficient to cover all other general living expenses, eg food, clothing, utility bills, hobbies.
Disposable income requirements are set by Barclays and must be met in all instances. Where these levels of disposable income are not realised, the application will be declined.
Allowable Income Types |
% Allowable |
Acceptable Evidence |
PAYE: Basic income |
100% |
Latest months’ payslips (or 5 consecutive payslips if paid weekly). |
PAYE: TAXABLE ALLOWANCES e.g. Mortgage subsidy / Car allowance / Shift allowance/ Large Town allowance |
100% |
Latest months’ payslip if paid monthly (5 consecutive payslips if paid weekly). |
PAYE: OVERTIME COMMISION AND BONUS paid monthly (or more frequently) |
50% |
Latest 3 months’ payslips( 5 consecutive payslips if paid weekly) AND Corresponding latest full month’s bank statement (if requested) Please note where amount vary we will use the average value as a primary income. |
>50% up to 100% (Where sustainability can be evidenced by latest P60) |
Latest 3 months’ payslips( 5 consecutive payslips if paid weekly) AND Corresponding latest full month’s bank statement (if requested) AND Note: If >50% of an applicant’s 3-month average BOC is required, the lower of the following will be used in the affordability and LTI assessment (subject to cap at 100% basic salary plus allowances): ·100% of the 3 month average (as evidenced by the latest 3 month payslips and supported by the latest P60), or ·The sustainable amount evidenced by the latest P60. |
|
PAYE: ANNUAL/ QUARTERLY BONUS (or paid less frequently than monthly) |
50% |
Previous 2 years’ individual payslips showing bonus payments Or Latest 2 years’ P60s Or HMRC Annual Tax Summary Or Latest 2 years’ Tax Year End payslips (showing total income) – normally March. |
SELF-EMPLOYED: Sole trader/ general partnership |
100% |
Latest 2 years’ HMRC Tax Assessments (SA302) or Tax Calculations AND Latest 2 years’ tax year overviews. |
SELF EMPLOYED: Limited Company shareholder |
100% |
Latest 2 years’ HMRC Tax Assessments (SA302) or Tax Calculations AND Latest 2 years’ tax year overviews (Most recent year can be replaced by trading accounts). AND Most recent year’s trading accounts produced by a qualified Accountant (dated within 18 months of the application start date). Underwriters can accept unsigned accounts by verifying the accounts through Companies House. Note: Limited company shareholder directors with income taxed at source ONLY (PAYE), with not further tax to pay, are not required to provide tax calculations or tax year overviews, provided their annual earnings do not exceed £100,000. To validate the income, we require all of the following: ·3 months’ payslips ·Latest P60 ·Most recent years’ trading accounts produced by qualified Accountant (dated within 18 months of the application start date). |
SELF-EMPLOYED: Limited Liability Partnerships (LLP) Time as partner at current LLP
<1 year* (Applicant has not been partner long enough to have completed a tax return reflecting one full year as partner)
|
100% |
Employed/Self-employed previously: The latest partnership agreement/ contract AND The most recent full month’s bank statement evidencing income AND A P60 reflecting PAYE income for the most recent full tax year OR (For Self-Employed only) Latest 2 years’ tax year overviews (Most recent year can be replaced by trading accounts). |
SELF-EMPLOYED: Limited Liability Partnerships (LLP) Time as partner at current LLP
1-2 years* (Applicant has completed one tax return reflecting one full year as partner) |
100% |
Employed/ Self-employed previously: Latest HMRC Tax assessments (SA302) or tax calculation* AND Latest tax year overview AND The latest partnership agreement/ contract. |
SELF-EMPLOYED: Limited Liability Partnerships (LLP) Time as partner at current LLP
>2 years (Applicant has completed at least two tax returns reflecting at least two full years as partner) |
100% |
Employed/Self-employed previously: Latest 2 years’ HMRC Tax Assessments (SA302) or tax calculation* AND Latest 2 years’ tax year overviews (Most recent year can be replaced by trading accounts).
Overseas profit
If the applicant is an equity partner in a LLP with overseas profit where the income/ profit share attributable to the applicant from the overseas profit is required for affordability purposes then, provided the overseas profit is remunerated in Sterling with no exchange from any foreign currency, this income can be considered. To evidence this information, the letter from the Finance Director/ senior partner, mentioned above must also confirm the following: How long the applicant has been a partner in the firm Applicant’s level of income Jurisdiction where the applicant is based That the applicant is contracted and remunerated in sterling. |
FOSTER INCOME |
100% |
Latest 2 years’ Local authority statements or equivalent (latest issued no longer than 18 month prior to application) OR A letter from the foster agency confirming the total foster income received for each of the last two years and latest 3 months’ bank statements. NOTE: Care: Assessment required of sustainability and continued affordability over the term. Children under care must be recorded as financial dependents for affordability purposes. |
INCOME FROM FIXED-TERM CONTRACTS (CONTRACTORS) |
100% |
Umbrella company (PAYE) Most recent contract(s) covering a 12 month-period AND Latest 3 months’ payslips (5 consecutive payslips if paid weekly). Note: Applicants employed in professional roles where contracts are provided on a fixed term basis, but each contract rolls to the next placement and so the overarching employment does not change (i.e. Junior Doctors, Teachers, Junior Solicitors), should be keyed as employed. These roles will all receive a salary. |
UNEARNED INCOME E.G. FROM INVESTMENTS OR TRUST FUNDS ETC. WHICH ARE FREE FROM ENCUMBRANCES |
100% |
Latest 3 months’ consecutive bank or building society statements confirming receipt of income AND Evidence of the source e.g. portfolio of stocks and shares AND Letter from qualified accountant confirming income for last 6 months in addition to advising source, that there are no encumbrances and that the income covers the term of the proposed mortgage AND Corresponding Tax Calculation. Care: assessment required of sustainability and continued affordability over the term. |
MAINTENANCE PAYMENTS |
100% |
Court Order OR CSA/Child Maintenance Service Arrangement OR Latest 3 months’ consecutive bank or building society statements confirming receipt of income . Care: assessment required of sustainability and continued affordability over the term. |
WORKING TAX CREDITS |
100% |
HMRC tax credit award letter (all pages) AND Latest full months bank statements clearly identifying the source of the income. |
CHILD TAX CREDITS |
100%* |
HMRC tax credit award letter (all pages) AND Latest full months bank statements clearly identifying the source of the income. *Not acceptable where the children are 13 or over. |
CHILD BENEFIT |
100%* |
DWP child benefit letter (all pages) OR Latest full months bank statements clearly identifying the source of the income. *Not acceptable where the children are 13 or over or highest earning applicant has a gross income of £60,000 or more. |
SCOTTISH CHILD PAYMENT |
100%* |
Social Security Scotland letter (all pages) OR Latest full months bank statements clearly identifying the source of the income. *Not acceptable where the children are 11 or over. |
UNIVERSAL CREDIT (UC) |
100%* |
3 months’ Universal Credit (UC) statements (printed online statements acceptable) AND Latest full months bank statements clearly identifying the source of the income. *Care: The following elements of Universal Credit are not considered sustainable income and should be deducted from the total amount received (if this results in a negative amount then no Universal Credit should be recorded): ·Housing Benefit: where this element will cease after completion. ·The ‘Child Element’ where the children are 13 or over.
Note: Income evidenced as being received in the form of Universal Credit payments for an applicant can only be considered where this is clear evidence of receipt of another form of allowable gross income for that applicant. Where amounts vary, we will use the average value however, care should be taken to understand if the amount of UC payable has reduced permanently as a result of means testing (i.e. due to the customer’s earned income increasing) in which case the lower amount should be used. Where a joint UC statement is provided as evidence of income and not all of those named on the joint statement are also party to the mortgage application, the additional evidence must be provided to clearly identify the portion of that income attributable to the mortgage applicant(s). Disability benefits must be in the name of the mortgage applicant in order to be considered however, if the disability benefit income paid to the mortgage applicant is for the benefit of the applicant’s dependent(s), then this cannot be considered as part of the affordability assessment. |
DISCRETIONARY MORTGAGE SUBSIDIES AND HOUSING ALLOWANCE |
100% |
Contract of employment. Care: assessment required of sustainability and continued affordability over the term. Restricted term subsidies may only be considered as a secondary income subject to a minimum term of five years. |
UK STATE PENSION (CURRENTLY RECEIVING) |
100% |
Latest full months bank statement clearly identifying the source of the income as state pension OR Proof of benefit letter. |
DISABILITY / STATE BENEFITS |
100% |
Latest DWP Benefits Statement AND Latest full months bank statements clearly identifying the source of the income. Allowable benefits: ·Disability Living Allowance (DLA) – being replaced by the Personal Independence Payment ·Attendance Allowance ·Income Support ·Council Tax Benefit ·Carer’s Allowance ·Disability Working Allowance ·Incapacity Benefit ·Industrial Injuries Disablement Benefits ·Employment and Support Allowance (replaced Incapacity Benefit/Income Support in October 2008). Care: Disability benefits must be in the name of the mortgage applicant in order to be considered however, if the disability benefit income paid to the mortgage applicant is for the benefit of the applicant’s dependent(s), then this cannot be considered as part of the affordability assessment. |
PERMANENT INCOME POTECTION PAYMENTS |
100% |
Policy statement clearly laying out pay-out schedule and amounts. 100% received net of tax and should be treated as such in assessing affordability. “Grossing-up” calculations may be conducted to ascertain an equivalent Loan to Income multiple to be used in the assessment). Care: assessment required of sustainability and continued affordability over the term. |
PERSONAL AND WORKPLACE PENSIONS AND ANNUITIES* (CURRENTLY RECEIVING) |
100% |
Latest full months bank statement clearly identifying the source of the income AND One of the following: ·Pension payslip ·Pension statement ·Annuity/Pension letter ·Pension P60.
Note: Pension statements and annuity letters may not be handwritten or amended and must: ·Show applicant’s name and address, which must match that stated on the application form ·Show pension/ annuity company’s name, address, telephone number and company’s registration number (if Limited) and be on headed paper or show company stamp ·Show pay dates ·Cover at least one month (five consecutive weeks) ·Show gross income ·Show net pay. Pension statements (Private/Company/State) must: ·Show regularity of payment ·Not be older than 12 months. Annuity letters must: ·Show lump sum invested in fund ·Show amount payable monthly ·Show end date if applicable ·Not be older than 12 months. *Note: Drawdown from a Self-Invested Personal Pension (SIPP) is not an acceptable income. |
PENSIONS (NOT YET RECEIVING) E.G. WHEN PROPOSAL TAKES APPLICANT PAST THEIR STATED RETIREMENT AGE. |
100% |
Statements from the organisation providing the pension confirming both the projected pension income and the assumed normal retirement date OR FCA regulated letter from the Scheme Administrator. |
A full personal credit check will be undertaken on each applicant.
Applications for the purchase of residential properties that will be occupied by a dependant relative of the applicant are acceptable under lending standards.
If the property being bought is being sold by a dependant relative who will then remain in the property after the sale takes place, the application must be declined.
Any dependent relative must be disclosed on the application as a financial dependent.
Any dependant relative must be occupying the property rent-free.
Any persons aged 17 or over who are not party to the mortgage but are, or will be, occupying the property during the mortgage term must be declared on the application as an occupier.
Where a property is being purchased, applicants are expected to provide a deposit of at least 5%* of the purchase price
*The personal stake may vary depending on specialist schemes or circumstances where loan to value restrictions apply.
The applicants must declare the source and amount of their deposit on the application form. Usually, the deposit will be from the applicants’ own savings, the sale of their previous property, a gift from relatives or a combination of these sources.
It is not acceptable for applicants to resort to secondary borrowing to fund the deposit, for example, by raising a personal loan. The only exception to this rule is, where the applicant is raising a deposit from the equity in another property.
For all purchase applications the applicant must provide documented proof of the source of the deposit.
Staff working in the UK for embassies, high commissions and international organisations (eg, United Nations) benefit from diplomatic immunity. Mortgage requests from applicants who have diplomatic immunity are outside of lending standards and should be declined.
Mortgage applicants must be first-time buyers who haven’t previously held a mortgage in the UK or abroad. This applies to all applicants for a joint application.
You will need to confirm the identity and verify the address of each customer, before you submit an application. If you are interviewing the client face-to-face and they are new to Barclays you will need to obtain one form of personal identity and one form of address verification and the documents must be from different authorities or providers.
If you do not meet them face-to-face, you will need to obtain one form of personal identity, one form of address verification plus one further supporting item and all documents must be from different authorities or providers.
You must review and certify the documents, we do not allow 3rd party certification e.g. Post Office. We do however accept documents certified by Barclays branch staff.
Details of identity and address verification must be captured within the application there is no need to send copies of the documents to us, although you should retain copies as we may on occasion ask for copies to be submitted to us.
The following documents are not acceptable as proof of identity or address verification:
The lists below provide the most commonly used items for proof of ID and address. If using any of these documents, please be aware of their specific requirements. If you hold alternative documentation please contact the Intermediary Support Team via live chat or call 0345 073 3330 for guidance about other acceptable documents or with any queries about the criteria.
NEW: Address verification – documents the customer has printed from the relevant secure internet site.
These can only be accepted alongside the following ID documents:
The name and address on the above ID document MUST match the name and address on the internet printed address verification document. If the customer does not have the above ID available or if the name and address do not match – you CANNOT accept prints from the internet.
We can only issue a mortgage offer once all proof of identity and address requirements have been successfully completed for all clients
If the bank statements are from the internet (i.e. screen shots or print offs from internet banking websites/applications) then they are acceptable if either (1) they have been stamped and certified by the issuing bank or (2) the statements show the sort code, account number and the applicant’s full name (or this information can be seen elsewhere and cross-referenced to full bank statements).
Conditions
Exclusions
Criteria
This facility is available for Barclays Residential Mortgages and Openplan Offset products, available via all channels. In cases where this arrangement is required, the following must be adhered to:
All other elements of Standard Lending Policy are to apply.
Notes:
For intermediary use only.
The maximum number of borrowers allowable is 4. Where there are 3 or more applicants, the Barclays Group will use only the 2 highest incomes when applying income multiples and assessing affordability. All financial commitments from all applicants will be taken into account when assessing affordability.
Only 2 borrowers are allowed for Openplan Offset Mortgages.
All mortgage applications will be assessed in terms of length of time living in the UK and rights to reside. There will potentially be further checks dependent on the application LTV.
Living in the UK for more than 1 year | Living in the UK for less than 1 year | |
---|---|---|
Applicant is a British citizen, Irish citizen or has Permanent Rights to Reside (PRR), Settled Status or Pre-settled status (EU settlement scheme) | Standard criteria applies | Maximum 90% LTV. Additional underwriter checks apply* |
Applicant does not have Permanent Rights to Reside (PRR), Settled Status or Pre-settled status (EU settlement scheme) | Maximum 90% LTV, additional underwriter checks will apply if LTV is more than 75%* | Available for Premier/Wealth qualifying customers. Maximum 75% LTV. Additional underwriter checks apply* |
*Additional checks
We can’t consider applications from refugees until they’ve got a permanent right to reside in the UK.
Depending on the circumstances of your client's application, supporting documents may be required for the mortgage to be assessed and underwritten. By providing the documentation we need at the outset you’ll help us make the experience for you and your client as smooth and efficient as possible.
Submitting applications via MAX will enable us to provide the best possible service.
For details of documentary requirements for employed income, please see Criteria and Packaging Guide [PDF, 782KB].