General Information
Mortgages, Loans and Overdrafts
What can I use my Mortgage or Loan for?
Our Mortgages and Loans are mainly used to purchase or re-mortgage residential property.
If you are re-mortgaging to us or are an existing Mortgage client looking to borrow more money we do allow for our Mortgages to be used for:
- Purchase of residential property overseas (where borrowing is secured by UK property)
- Improvements to the main residence or second home
- Release of equity for specific long term requirements
This list is not exhaustive and each client application is reviewed on a case by case basis.
Will my Mortgage or Loan be secured on my property?
If you are taking out one of our Mortgage products, we require security over a property. In England and Wales this is done by you granting a Mortgage Deed in our favour over the property and in Scotland this is done by you granting a Standard Security in our favour over the property. The Mortgage Deed and the Standard Security are legal documents which create security over the property for all amounts you owe us now or in the future. We only offer Mortgages where the borrowing is secured by property located in England, Wales or Scotland.
Our Loan Products can also be secured by cash deposits or offered on an unsecured basis. Other security types are accepted where the purpose of the borrowing is not to acquire or retain property.
What length of Mortgage or Loan term can be provided?
Our Mortgages can be taken over a term of 2 to 25 years and our Loans can be taken over a term of 6 months to 25 years. Certain Loan products may be available on a shorter term. Please speak to your Private Banker for more information.
What types of Mortgages and Loans does Coutts & Co. offer?
We offer the following different types of Mortgages:
Fixed Rate
With a fixed rate mortgage, the interest rate remains the same for a set period of time. This means that your mortgage payment would be the same amount every month during that period.
Tracker
A tracker mortgage is a type of variable rate mortgage where the interest rate tracks another rate such as the Coutts Bank Base Rate at a set margin above or below the that rate.
House Mortgage Rate
Our House Mortgage Rate (“HMR”) is a type of variable rate mortgage. When a fixed or tracker rate ends, you would automatically be transferred onto our HMR.
See more about the type of Mortgages Coutts & Co offer
We offer the following different types of Loans:
Base Rate Loan
With a Base Rate Loan, the interest rate is set as a margin above the Coutts Bank Base Rate.
Fixed Rate Loan
With a Fixed Rate Loan, the interest rate is fixed at the outset using a margin above the cost of funds on the day of completion.
Bridging Loan
A Bridging Loan can help clients to buy their next property pending the sale of their existing property.
We offer both Capital and Interest and Interest Only Mortgages and Loans. Mortgages can be paid back on a monthly basis and loans can be paid back on a monthly, quarterly, bi-annual or annual basis depending on the product.
A Capital and Interest Mortgage/Loan means that your agreed payments will pay back both the capital borrowed and interest on the capital borrowed. This means that as long as you keep making your agreed payments you will not owe the bank any money at the end of the term.
An Interest Only Mortgage/Loan means that your agreed payments will only pay back the interest on the capital borrowed. You will still owe the full amount at the end of the term.
If any part of your Mortgage/Loan is an Interest Only facility, it is entirely your responsibility to make sure the financial arrangements which you have chosen to repay the capital is/are suitable and maintained throughout the term.
Any shortfall at the end of the Mortgage/Loan term is your responsibility and if you cannot repay the Mortgage/Loan at the end of the term, you could lose your home.
What if I live abroad or earn income in a currency other than Sterling?
If you are using income or assets which come from a currency other than Sterling to repay your Mortgage/Loan or you are resident overseas, your Mortgage/Loan will be classed as a Foreign Currency Mortgage/Loan under regulatory rules.
We will consider you for a Mortgage/Loan if your income is not in Sterling. Please speak to your Private Banker for more information.
We will set out the risks of having a Foreign Currency loan in any Mortgage/Loan illustration you receive so that you can understand the implications of this.
Once the Mortgage/Loan has been drawn down, we will monitor your account to check for fluctuations in currency exchange rates. We will contact you if there are fluctuations in currency exchange rates of more than 20%, to your detriment, between the currency of your Mortgage/Loan and the currency of the income or assets which you are using to repay the Mortgage/Loan or the currency of the country in which you are resident.
A movement in the exchange rate may make it more difficult for you to afford your Mortgage/Loan payments and/or affect the value of the asset(s) you intend to use to repay your Mortgage/Loan.
You should ensure that you understand the implications of having a Foreign Currency loan and that you are able to continue making your repayments or repay your Mortgage/Loan in the event of movements in exchange rates. Please seek independent financial advice if you have any concerns in this respect.
HOW MUCH WOULD MY REPAYMENTS BE?
If you wish to get an estimate of how much your repayments could be you should contact your private banker.
An interest only mortgage of £750,000 payable over 25 years initially on a fixed rate for 2 years at 4.99% and then on our variable house mortgage rate of 7.50% for the remaining 23 years would require 29 monthly payments of £3,120.74 and 270 monthly payments of £4,689.90 and one final payment of £4,684.13. The total amount payable would be £2,113,333.59 made up of the loan amount plus interest (£1,361,458.59) and a product fee (£1,875) and a valuation fee (£0) the overall cost for comparison is 7.3% APRC representative.
Does my property need to be valued as part of my Mortgage/Loan application?
Where your Mortgage/Loan is to be secured by property, we must receive a satisfactory valuation report on the property before we will release the money unless we write and tell you otherwise.
The valuation and any re-inspection of the property are solely for our purposes. We are not responsible for its accuracy.
You are responsible for paying all valuation and re-inspection fees in respect of the property unless we tell you otherwise.
Do I need to have building insurance?
Yes, if you are providing a property as security, you must have appropriate buildings insurance for that property during the term of the Mortgage/Loan and provide us with confirmation that you have this cover in place. You are not obliged to buy this insurance from us. If you do not have buildings insurance you will be in breach of your Mortgage/Loan terms.
Do you intend to let out your property for less than 90 days in a rolling 12-month period ?
If you meet the below conditions, you won’t need to get prior permission from us.
- You agree the occupation under license and not using a tenancy agreement
- The property isn’t occupied by someone other than you for longer than 90 days in any rolling 12-month period
- You notify your insurer of the letting and obtain the insures consent. Your buildings insurance is not invalidated and stays in force at all times.
- You’re not breaching any requirements or regulations of local or other relevant authorities
- You’re not breaching ant requirements from special schemes (for example, Help to Buy or shared ownership), you might need to get permission from your scheme provider first. You might also need consent from any second charge lenders
- If the property is leasehold, the conditions in the lease must be met before Short Term Let agreement starts and the customer must have permission from the freeholder.
- It is your responsibility to disclose any taxable income generated from Short Term Let to HMRC.
- If you have a Buy to Let property, you may only use Short Term Lets to cover rental void periods.
If you want to let out your home but don’t meet the above conditions, please contact your private banker.
What costs would I be charged?
We may charge you fees in conjunction with your Mortgage/Loan, including the following:
- Arrangement fees when you take out the Mortgage/Loan
- Valuation fees (where applicable)
Where applicable, a non-refundable fee will be payable to your solicitor/conveyance for putting in place the security.
Please see our Tariff of Mortgage Charges
There may also be other taxes and costs associated with your Mortgage or Loan. Additional early repayment charges (ERC) may be applicable. Please make sure you are aware of these before entering in to any agreement. Please speak to your Private Banker for more information.
Available to Coutts clients only.
As a last resort, your property may be repossessed if you do not keep up with payments or breach your other obligations under the Mortgage/Loan contract
Execution Only - Loss of Protection Disclosure Document
Initial Disclosure Document - About our Mortgage Services and Costs
Overdrafts
Coutts & Co. Registered in England and Wales No. 36695. Registered office: 440 Strand, London WC2R 0QS. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Firm Reference Number 122287.
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