Intelligent Finance – General Mortgage Information
The following details are general information about Intelligent Finance mortgages. Please note that
Intelligent Finance no longer provides the ability for customers to apply for further advances or to
change their mortgage deal.
What types of mortgage products are there?
There are different types of mortgage products with different types of interest rates. It is not
possible for customers to change their mortgage deal. If you move home, are not increasing your
loan and meet our lending policy at the time that you apply, you may be able to take your unexpired
special rate with you to a new mortgage.
Type of product
How it works
Early repayment charges
What it means for you
Offset Fixed Rate Mortgages
Your interest rate and your monthly payments are set at a certain level for an agreed period (the special rate period). At the end of that period, you will switch to a variable mortgage rate.
Early repayment charges usually apply during the fixed rate period.
Sometimes they can apply after the fixed rate period too.
Your interest rate stays the same during the fixed rate period, even if the Bank of England base rate changes.
You won’t benefit if interest rates fall. The interest rate will stay the same.
Offset Tracker Mortgages
This is a variable rate loan with an interest rate that is above, below or the same as the Bank of England base rate or some other external rate it tracks for an agreed period (the special period). At the end of that period, you will switch to a variable rate mortgage rate.
Early repayment charges usually apply during the tracker rate period.
Sometimes they can apply after the tracker rate period too.
It may benefit you to have a tracker if you can afford to pay more when interest rates rise so that you can benefit when they fall.
A tracker may not be suitable if you live on a tight budget that won’t stretch to higher monthly payments when rates rise.
Intelligent Finance’s offset variable mortgage rate (currently 2.25%)
Intelligent Finance’s standalone variable mortgage rate (currently 2.25%)
A variable rate we set. We decide when and how much to raise or reduce these rates. These rates aren't usually available as a stand-alone product. They are usually a rate we switch you to at the end of your product rate period.
Early repayment charges don't usually apply, but check your Illustration or offer letter to be sure.
It can pay to stay on a variable rate if you can afford the monthly payments when interest rates rise so that you can benefit when they fall.
A mortgage of £145,000 payable over 20 years, on our variable rate of
2.25% for 20 years, would require 240 monthly payments of £749.92.
The total amount payable would be £180,111.07 made up of the loan amount, plus
interest (£78,598.64) and a valuation fee.
The overall cost for comparison is 4.7% APRC representative.
What happens if I move house?
If you have not come to the end of your special rate period, you can apply to take your unexpired
special rate to your new Intelligent Finance Mortgage.
You will only be able to move your special rate to a new loan on a like for like basis (product and
loan amount). Your Mortgage Illustration and your offer letter will say if this is the case. You will
only be able to take your special rate with you if you can meet our lending policy rules at the time
that you apply.
Types of property we will lend against:
The property you buy must be located within the UK. Loans can only be used to buy your main
If the property is freehold, then you will own the property and the land it’s built on. We don’t lend
on freehold flats in England, Wales and Northern Ireland.
If the property is leasehold, then you will own a temporary right to occupy the property and the land
it’s built on. The property and the land are owned by someone else and they lease them to you for a
number of years. Leases can last for decades or centuries. There is usually an annual charge for the
lease, called a ground rent. We’ll only lend on leasehold properties with at least 70 years left on the
lease when you apply. Before you buy, your conveyancer will check the lease terms to make sure
they are acceptable. In Scotland (except in rare cases where there is a form of long lease known as a
‘tack’) all properties are owned outright by the ‘registered proprietor’.
New build or converted properties
A new property or a property that has been built or converted within the last ten years should be
part of a Building Standards indemnity scheme. This gives a ten-year warranty against material
defects. There are a number of acceptable schemes, but the main one is run by the National House-Building
Council (NHBC). We’ll consider lending on a property that is not part of one of these
schemes if it comprises of a development of no more than 15 properties and meets our current
We’ll need a professional assessment of the property’s market value when you apply for your
mortgage, we’ll ask you to choose from three levels of inspection and report.
Level 1: A basic valuation
This is the most basic property valuation and the least expensive, it is based on a limited inspection.
It is prepared for us to make an assessment of whether we want to lend you the money to buy the
property. It is not a condition survey and only gives you limited information about the property. So if
you choose this type of valuation, bear in mind that the report might not mention defects that may
have affected your decision to buy. You should not solely rely on it when making your decision
whether or not to purchase the property. You can choose to upgrade your valuation to a level 2 or
level 3 condition survey for an additional cost.
Level 2: Survey and valuation
This survey, which may either be a Colleys Property Check or Royal Institute of Chartered Surveyors
(RICS) HomeBuyers Report, is an intermediate level of report. As well as assessing the property’s
value, the survey provides information on its condition on the day of inspection. It will also give
guidance on serious defects visible at the time of inspection and other issues that should help you
decide whether to buy the property. The report will highlight the urgency of any repairs. If
appropriate, it will recommend getting specialist advice.
Level 3: Building survey
If you wish you may upgrade to a level 3 building survey, this is the most comprehensive type of
survey and the most costly. A building survey is a detailed report that can be tailored to fit your
needs. The surveyor will discuss what kind of report you want beforehand. Building surveys do not
provide a valuation of the property, so you will need to take into account the extra cost of a level 1
What mortgage terms are available?
Mortgage terms of up to 40 years are available; the minimum term we’ll consider is 5 years. The
term affects the total cost of the mortgage. If you take out a repayment mortgage, the term also
affects the monthly payment. With a repayment mortgage the longer the term, the lower the
monthly payment. However, it will take you longer to repay the loan so you will pay more interest.
This means it will cost you more over the life of your mortgage. With an interest-only mortgage, the
length of the term makes no difference to the monthly payments because these are repaying only
the interest charges and not the loan itself. You need to make sure you can repay the loan balance
at the end of the mortgage term.
Repaying your mortgage
There are three different ways of repaying your loan. These are repayment, interest-only, and a
combination of repayment and interest-only.
Every month, your payments go towards reducing the amount you owe as well as paying off the
interest. This means that each month you are paying off a small part of your loan. Your annual
statement will show your loan getting smaller. However, in the early years your monthly payments
will mainly go towards paying off the interest, so the amount you owe won’t go down much at the
With an interest-only mortgage, your monthly payment pays only the interest charges on your loan –
you don’t pay off any of the loan amount. This means your monthly payments will be less than if you
had a repayment mortgage. However, the total cost of an interest-only mortgage will be higher
because you will be paying interest on the full loan amount throughout the mortgage term. As long
as you’ve made all your monthly interest payments, the amount you owe at the end of the mortgage
term will usually be the same as the amount you borrowed. So, to repay the loan, you need a lump
sum at the end of the term. You are responsible for making sure you have a plan in place to repay
Combination of repayment and interest-only mortgage
It’s possible to split a mortgage between repayment and interest-only. This means that at the end of
the mortgage term you will still have an amount of the mortgage to repay, which you will need to do
using a lump sum. You will need to make sure you have a plan to repay this amount at the end of the
If you comply with the terms and conditions of a repayment loan, the monthly payments which you
make will repay the loan in full by the end of the loan term. For interest only loans however, you will
need to have a repayment strategy in place to repay the capital when the loan terminates because
compliance with the terms and conditions applicable does not ensure repayment of the loan in full.
Annual percentage rate of charge (APRC)
Your Mortgage Illustration will show you the APRC for your mortgage. This is a notional annual
interest rate which takes account of fees and charges to reflect the total cost of your mortgage. Your
Mortgage Illustration will detail the fees which are included in this calculation. An APRC is calculated
using a standard method so it provides an effective way for you to compare quotes from different
lenders. The illustration will also show an APRC based on what would happen if interest rates went
up to their highest levels over the last 20 years and how much this would impact on your monthly
There are other costs that you should be aware of in purchasing a home that aren’t included in the
cost of the mortgage, these could include:
Conveyancing fees - Charged by a conveyancer for doing the legal work connected with
buying your property. Fees can vary and are often based on the purchase price plus other
Stamp Duty Land Tax - This is a government tax charged on land and property transactions in
the UK. The tax is charged at different rates and has different limits for different types of
property and values of transaction.
Land Registry fees - The Land Registry or Registers of Scotland will charge for any searches of
the property register the conveyancer asks for. It also charges for registering you as the
owner and us as the lender. You must pay both these costs.
Local authority search fees - The local authority will charge for answering your conveyancer’s
questions about the property you want to buy, such as whether the local authority
maintains the roads adjoining the property or whether you'll be responsible for this.
Early repayment charges
You may have to pay an early repayment charge if you repay part of your loan before the end of any
early repayment charge period that applies. Your Mortgage Illustration will tell you if an early
repayment charge period applies to your mortgage and what period any charge will apply for. It will
never exceed the maximum amount shown in your Mortgage Illustration. If you decide to repay
your existing Intelligent Finance mortgage then we will not charge you any Early Repayment Charges
that may apply however, these charges will be applied if you decide to repay part of your mortgage.
Once you get your mortgage offer
- Take time to read your mortgage offer and conditions because they are really important.
- Ask your conveyancer to explain anything in the mortgage offer and conditions that you don’t understand.
- Get several quotes for buildings and contents insurance and decide which one you’re going to accept.
- First payments are taken a month in arrears so we take a full months payment a month after the
completion date. We’ll write to you when your mortgage starts to confirm how much the
payment is and when we’ll collect it.
If you can’t make your monthly payments
Sometimes circumstances change unexpectedly such as you lose your job. If this happens, it may be
difficult for you to meet all your financial commitments and you may need some help for a while. If
you find yourself in this situation, you should contact us straight away so we can give you the help
If your monthly payments are up to date but you are worried you may not be able to make some or
all of your future payments, you should call us. We may be able to reduce your monthly payments
for a while until you get back on your feet. When you call we can discuss the various options
available to you. Remember, the sooner you contact us, the greater the chance we’ll be able to find
a way to help you.
What happens if I fall behind with my monthly payments?
If you miss your regular monthly payment and we haven’t agreed that you can do so, we’ll write to
you. You may also have to pay an arrears charge.
If after reasonable requests you do not pay the amount due, we may also charge you the costs of
recovering the money you owe us. We’ll always tell you when we intend to make these charges and
how much they will be. There may also be extra legal costs if we have had to get a court order to
take possession of your property. You will have to pay these and they can be high.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
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