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Getting a Mortgage in Scotland

A Guide to Mortgages in Scotland

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By Pete Mugleston  | Mortgage Advisor Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 12th July 2019* | Published: 10th July 2019

Are you looking to get a mortgage in Scotland? We receive many enquiries of this type, from natives residents, as well as Scottish expats and non-citizens. 

So whether you’re a first-time buyer, looking to remortgage or after a buy to let mortgage, we work with experts who can answer your every query and give you the right advice. 

Even if you’ve been declined by some lenders or don’t have a perfect credit history, there could be options you can explore. 

To find out how mortgages in Scotland work, how long the process will take and for access to the best, free mortgage advice, speak to one of the Scottish mortgage brokers we work with. 

This article explains the requirements and conditions when getting a mortgage in Scotland, plus any country-specific mortgage criteria you need when looking for a Scottish mortgage.

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Can I get a mortgage in Scotland?

As long as you meet the lender’s eligibility and affordability requirements, then absolutely! Mortgages are readily available in Scotland, although there are fewer lenders operating there than in England and many of them have postcode restrictions.

With this in mind, it’s important to speak to a whole-of-market brokers to make sure you end up finding the best deal that you qualify for, especially if you’re buying outside of a major town or city.

How do mortgages in Scotland work?

Mortgages in Scotland work in exactly the same was as they do in England and Wales, though there are some territory-specific variables to take into account.

When you are looking at buying property in Scotland it is useful to know that there are differences between mortgages in Scotland and the rest of the UK. 

Scotland has a different legal system to the rest of the UK and there are three main differences when buying property north of the border:

  • Speed of transaction
  • Clarity of valuation
  • Certainty of sale

We’ve covered these points in detail in the next section.


How to get a mortgage in Scotland

We recommend  starting by consulting with a whole-of-market broker that’s got experience with mortgages in Scotland.

As well as getting a mortgage agreement in principle, in Scotland you'll need to have your funding in place before you make an offer on a property. This might be difficult if you're also selling a property, but it also means that chain breaks are rare. You'll also have to engage a solicitor much earlier on, as they'll put your offer forward. The vast majority of Scotland mortgages are freehold, meaning you can feel secure in the knowledge it’s yours for as long as you want it.

While the advertised property price is usually 5-10% less than the valuation given in the home report (see the home report section in this article for further information) you may also find property prices advertised as ‘offers over’, meaning that the buyer will only accept bids over the advertised price.

Once a bid has been accepted, the transaction is legally binding. The parties will then negotiate the finer details like the entry date and any items that are to stay in the property – a process called 'concluding the missives'. 

Once that process has been completed the sale is legally binding, and because of that, it is exceedingly rare for a chain to collapse. 

How long does a mortgage application take in Scotland?

Regarding the mortgage timeline in Scotland, most property sales are completed within six to eight weeks from the date the bid is accepted, although it is possible to complete within four or five weeks if the transaction is straightforward.


How much deposit do you need for a mortgage in Scotland?

The deposit amount that lenders will request from you will vary from one provider to another and will usually hinge and the level of risk the deal carries. 

Are there 5% deposit mortgages in Scotland?

Yes, as a general rule, most residential lenders offer up to 85% loan to value (LTV), some 90%, and a few 95% (5% deposit), depending on the perceived risk and their appetite to lend. 

Can I get a new build mortgage in Scotland?

If you’re seeking a mortgage for a new build property, non-standard construction, or are planning major renovation works, many lenders require a larger deposit - the lender will usually cap the LTV at 75-80%.

Are there no deposit mortgages in Scotland?

No deposit mortgages in Scotland are rare, but if you’re wondering how to boost your deposit there are government schemes that may be able to help, or you could consider a guarantor mortgage - we’ll discuss these options in more detail later on.

If you are unsure what level of deposit you need why not speak to one of the Scottish mortgage experts we work with?


Make an enquiry


Title burdens

Title burdens are conditions within the title deeds attached to owning the property. They can range from where things like where rubbish bins can be placed to restrictions on how the property can be used and altered. The seller will sign the transfer of the title deeds, which is known as the ‘disposition’.


Sasine Register

The Sasine Register is the oldest national public land register in the world, dating back to 1617. However, it is in the process of being replaced with the map-based Land Register of Scotland and will be closed by 2024.

The Sasine Register is now closed to the registration of deeds regarding:

  • Dispositions
  • Standard securities
  • Leases
  • Assignations of leases
  • Registered plots of land or leases registered in the land register

This does not impact first-time buyers but from 1st April 2016, for homeowners in Scotland, your property is on the Sasine Register and if you want to take out new or additional borrowing with a new lender it will trigger an application to the land register.


Home report

All properties being sold on the open market in Scotland are required to have a home report, which is used by mortgage companies when they consider lending on a property (similar to a mortgage valuation report).

This home report is made up of a ‘single survey’ (like a mortgage survey), a property questionnaire and a home energy report, completed by the selling party. A chartered surveyor will conduct the single survey, which reports on the condition of, and provides a valuation of the property.  


How much mortgage can I get in Scotland?

So, what size mortgage can you get in Scotland? This all depends on your income and affordability.

Most mortgage providers cap their lending at 4.5 times the borrower’s income, some stretch to 5 times and a minority will go as high as 6, under the right circumstances.

When calculating your budget, it is important to consider not just the mortgage repayments but other associated costs such as mortgage arrangement, transfer fees, legal fees, Land Registry fees, moving costs. On properties costing more than £145,000, Land and Buildings Transaction Tax (LBTT) will apply – this is similar to Stamp Duty in England and Northern Ireland. 

What happens when I get a mortgage agreement in principle in Scotland?

Once you have a mortgage agreement in principle in Scotland, you might also have to pay a fee to reserve it. 

Mortgage companies will calculate how much they are willing to lend you by assessing your income and financial commitments (loans, credit cards, child maintenance costs and so on), essential expenditure (utility bills, travel costs etc) and spending on quality of living and lifestyle, including clothing, toiletries and recreation.

What documents will I need to produce when applying for a mortgage in Scotland?

When applying for a mortgage in Scotland, you will need to provide proof of income. The requirements are different for those who are in permanent employment and the self-employed.

You will need to provide:

For more information make an enquiry and we’ll refer you to one of the experts we work with to ensure you get the right advice for your situation.


Make an enquiry


Lands and Buildings Transaction Tax

In Scotland, for properties costing more than £145,000, Lands and Buildings Transactions Tax (LBTT) must be paid within 30 days of completion.

The rates are calculated as a banded proportion of the total property value: 

  • 2% on properties between £145,000 and £250,000.
  • 5% on properties between £250,001 and £325,000.
  • 10% on properties between £325,001 and £750,000.
  • 12% on properties over £750,000.


Age

Older borrowers may find it harder to find a mortgage in Scotland, because much like in the UK, lenders can cap the maximum age at application, at the end of term or may not consider lending into retirement at all. That said, it is becoming slightly more common among lenders not to have a maximum lending age.

However, there may be other options you can explore. If you already own your own property (or the majority of it), you could consider equity release in the form of an interest-only lifetime mortgage. For more information on this, visit our later life lending section.

Alternatively, make an enquiry and we’ll refer you to one of the experts we with work for the right advice on later life lending.


Make an enquiry


How do I get the best mortgage rates in Scotland?

Getting the best rates in any part of the UK comes down to two things: meeting the eligibility requirements with as many lenders as possible and applying through a whole-of-market broker, like the ones we work with. That way, you will have access to all of the best deal that you qualify for.

How do I compare mortgage deals in Scotland?

Ideally, you will need to compare all of the deals on the market to make sure you end up with the best one available, but this can demand a lot of legwork.

Using online rates tables is not recommended, as the data they show is not tailored to you as an individual and they often give prominent placement to sponsored products.

With these things in mind, having a whole-of-market broker carry out a Scotland mortgage comparison on your behalf is the best course of action. Not only will this save you legwork, but it also spares you marks on your credit file since you’ll be paired with the right lender first time.


Types of mortgage in Scotland

There are many different types of mortgages available to all types of buyers in Scotland. Read ahead to compare mortgages in Scotland and find the right mortgage for you. 


What first time buyer mortgage schemes are available in Scotland?

There are a few different mortgage schemes in Scotland available to those looking to take their first step onto the property ladder. 

LIFT scheme mortgages in Scotland

The low-cost Initiative for First Time Buyers (LIFT) mortgage scheme in Scotland is a scheme started in 2007 by the Scottish Government. There are two different LIFT schemes, which can be the best option for many first-time buyers:

New Supply Shared Equity Scheme

This scheme enables you to buy a new-build property from a housing association or a housing co-operative, outright, while only paying between 51% and 80% of its value, though it is usually required you pay upwards of 60%. The remainder is funded by the Scottish Government. 

You can buy a bigger stake after two years, increasing again in the third year, until you own it all, although in some areas of Scotland the housing associations or co-operatives always retain a 20% stake in the property. 

You can also buy from a developer, under a version of this scheme called New Supply Shared Equity with Developers. Again, you will own the home outright, with the difference being that the government and developer jointly fund the equity loan. 

Open Market Shared Equity Scheme 

This scheme operates on a similar basis to NSSE except that you can buy a property on the open market for a stake of between 60% and 90%. 

The scheme gives priority to people who rent their home from a local authority or housing association, disabled people, members of the armed forces (and those who left within the past two years), and the widows and widowers of service personnel who died during service, for up to two years after their death. 

Registered social landlords assess all applications and administer the scheme on behalf of the Scottish government.

Guarantor mortgages in Scotland

A typical first-time buyer mortgage in Scotland involves a guarantor. In order to qualify for a guarantor mortgage in Scotland you will need a family member or close friend/benefactor to offer their home or savings as security against the loan.

With a guarantor mortgage you can borrow up to 100% of a property's value, with the maximum borrowable in cash terms being £500,000.

You might be more likely to get a mortgage, be able to borrow more or at a better interest rate, but there is a risk to the guarantor if you default on your mortgage payments.

Springboard mortgages Scotland

Provided by Barclays, the Family Springboard mortgage allows anyone to help you with a mortgage of up to £500,000 on a property in the UK (excluding new-builds) by providing 10% of the property’s purchase price by way of opening a Helpful Start account. This means that, at some lenders, the borrower doesn’t need to pay a deposit and is effectively the only 100% mortgage for first time buyers in Scotland.

Repayments are charged at a fixed rate of interest for the first three years and as long as remortgage payments are paid on time, ‘helpers’ get their savings back after three years, with interest. 

Help to buy mortgages in Scotland

Help to Buy was originally just available in England but in September 2013 the Shared Equity element was rolled out in Scotland and will run until 2021. All the information you need can be found in our Help to Buy mortgages in Scotland article.

Shared equity mortgages in Scotland

There are two schemes for shared equity mortgages in Scotland - the New Supply Shared Equity Scheme (NSEE) and the Open Market Shared Equity Scheme.

Shared ownership mortgages

Aimed primarily at first-time buyers and prioritised for council and housing association tenants, Shared Ownership is a cross between buying and renting. You buy a share of the property - 25%, 50% or 75% - and a housing association or other social housing organisation, owns the remainder.

You will pay an occupancy charge (equivalent to a reduced rent) to the housing association or organisation on the part of the property that you don’t own. 

We work with experts who have access to shared ownership mortgage lenders in Scotland and can answer any queries you may have. 

Right to buy mortgages in Scotland

The right to buy scheme ended in Scotland in 2016 and right to buy mortgages are no longer available.

Buy to let mortgages in Scotland

If you are looking for an investment property to let out in Scotland, you can find more information in our guide to Scottish buy to let mortgages.

Keyworker mortgages in Scotland

There are no specific keyworker mortgage schemes in Scotland but teachers, police and other keyworkers can take advantage of the other government help available to get a mortgage in Scotland outlined in this article. 

Alternatively, the experts we work with can provide free, independent mortgage advice for Scotland.


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ISAs

The Help to Buy ISA scheme is available in Scotland for properties worth up to £250,000 with any mortgage (not just Help to Buy mortgages). In order to qualify for a Scottish mortgage ISA you must be over the age of 16 and a first-time buyer looking for a property to live in (not to let out).

Savings are tax free just like any other type of ISA with the added bonus of government contributions. The government will top up your contributions by 25%, up to £12,000. So for every £200 you save the government will contribute £50, with a maximum contribution of £3,000.

You will need to save a minimum of £1,600 to qualify for the government bonus – that amount will give you a bonus of £400 – but you can start your ISA with a deposit of up to £1,000, which also qualifies for the 25% bonus. Once your savings have reached £1,600 you can claim the government bonus at any time. In order to qualify for the maximum bonus of £3,000 it will take just over four and a half years.

If you already hold a Cash ISA that you’ve paid into within the last year you will need to transfer the active cash into your Help to Buy ISA. The cash transfer limit is £1,200 – any more than this will need to be transferred into a Lifetime ISA, a stocks and shares ISA, an Innovative Finance ISA or a non-ISA account.

Self-build mortgages in Scotland

Self-build mortgages are available in Scotland; you can find all the information you need in our guide to self-build mortgages in Scotland.

Land and agricultural mortgages in Scotland

If you require a mortgage for agricultural, equestrian, leisure or development purposes you will be seeking a land, or agricultural mortgage. Land mortgages are not as easy to come by as property mortgages and the terms are usually more stringent. 

Banks in Scotland will usually loan between 30% and 50% LTV. However, a 100% mortgage may be available to you if additional security, such as a property you own, can be used to safeguard the loan. You will usually also need to acquire planning permission for the desired use of the land before you approach a lender.

Additionally, you will need to provide:

  • Three years' audited or certified accounts plus current management figures 
  • Two months' bank statements (up to six months in some cases)
  • An assets and liabilities statement

For more information about agricultural mortgages in Scotland, make an enquiry and we will put you in touch with one of the experts we work with to discuss your options.


Make an enquiry

Student mortgages in Scotland

The criteria requirements for student mortgages in Scotland are fairly strict. In most cases a guarantor and a 15% deposit are required (85% LTV) even if the student is in any form of employment. Requirements may also be affected depending on whether the student is funding their education with a government loan.

Furthermore, the guarantor must be a property owner who is a direct family member or legal guardian. They must have permanent residency and live in the UK and not be older than 75-80 at the end of the mortgage term, depending on the lender.

Joint ownership mortgages in Scotland

There are different types of joint ownership - joint ownership mortgages and ‘common property’.

There are some differences between the two - under joint ownership, if one of the owners dies, their share will automatically pass to the other person without incurring any conveyancing expenses.

Joint owners can sell or give away their share during their lifetime, not as part of their will, but with common property, the owners can sell or give away their share during their lifetime or in a will. 

Mortgages for second homes in Scotland

If you are looking into getting a mortgage for a second home in Scotland, whether it be an investment to let out or a holiday home, there are some factors to consider.

Most second home mortgages require a 25% deposit and your income will need to be able to cover both mortgages. If your credit history has been affected adversely since your first mortgage, this may impede your chances of being approved, so bear this in mind when approaching a lender. 

Second properties in Scotland are subject to an additional 3% Land and Buildings Transaction Tax (LBTT) as well as the standard rates - this applies to all properties, regardless if they meet the £145,000 threshold or not. 

Bad credit mortgages in Scotland

If you have poor credit history it can be intimidating to start the mortgage search, but there are options available to you when looking for bad credit mortgages in Scotland. Take a look at our section on bad credit or speak to one of the specialist online Scotland mortgage advisors we work with. 


Make an enquiry

Are there 100% mortgages in Scotland?

100% mortgages in Scotland are extremely rare, especially if you’re a first time buyer. Most lenders will only consider 85%, 90% and 95% LTV mortgages, although you may well be considered for a mortgage without a deposit in Scotland if you have a guarantor. Find out more about no deposit mortgages


Tenement properties 

More than a quarter of the housing in Scotland consists of tenements – a building or part of a building containing two or more flats, separated horizontally and designed for separate ownership. Houses converted into flats, high-rise blocks, traditional and modern building, and some business premises, constitute tenements. 

If you buy a flat in a tenement property, you will also own a share of the tenement’s common areas, and a share of the land on which it is built. You will also be liable for a share of the maintenance costs of those areas.

The title deeds to each flat will usually set out who owns what, but if they don’t, certain rules will apply, for example, the owner of the top-floor flat will own the roof space above it.


Feuhold properties and feu duty

This was a complex system abolished for the majority of Scottish properties in November 2004, but you should check with your solicitor to ensure it doesn’t apply to your property.


Mortgage repayment plans and rates

Getting a mortgage in Scotland works in the same way to the rest of the UK when it comes to repayment options. Most lenders offer two types of mortgage repayment plan:

  • Repayment mortgage – where you borrow money from a lender to buy your property and then repay it plus and interest that is charged to the loan.

  • Interest only mortgage – where you borrow money from a lender and repay the interest each month but not the capital sum. The mortgage debt itself is paid off at the end of the term, so most lenders will insist that the borrower evidences a viable repayment vehicle in advance.

Bear in mind that you will need to decide how much time you want to spend making the repayments. Most mortgages can run up to 35 years (longer, in rare cases) and while it may be possible to agree a shorter mortgage, it will increase your monthly repayments.

Speaking to one of the experts we work with is a good way to find the best mortgage rates in Scotland. Make an enquiry and we can put you in touch with an online mortgage broker in Scotland at your convenience.


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Secured loans

If you want to carry out home repairs or improvements, consolidate your debts or perhaps even start a business, you may be considering taking out a secured loan

Depending on your circumstances you may be able to borrow between £3,000 and £50,000 (specialist lenders may go much higher) and be repaid over up to 25 years, depending on the level of borrowing and how much the repayments are.

A secured loan in Scotland might also be referred to a second charge mortgage and while you won’t be able to use it to buy another property, it will appear on your title deeds.


Can I get a mortgage on a unique property in Scotland?

Every lender is different but many don’t accept property that is non-standard, unique, or listed, generally because of the fear that the properties are higher risk and less sellable.

However, there are some lenders happy to consider a wide range of property types. For more information on unique properties see our non-standard property section.


Large mortgage loans in Scotland 

Big mortgages, or large loans, are usually considered to be loans over £500k. The market on big loans may be more restrictive. You will usually be referred to a senior loan underwriter who will agree any loan at their discretion.

LTV for large loans mortgage in Scotland is usually 75%, with a few offering 80% - 85%, and a handful 95% LTV. Some lenders are flexible but most cap loans at lower income multiples


Remortgaging in Scotland

You might want to remortgage your Scottish property if your current deal is ending soon or you are considering switching from interest-only to a repayment mortgage. Perhaps you want to release equity from your property for renovations, reduce your LTV or consolidate debts

If you switch your deal before it ends you may incur a fee, and it is important to correctly calculate any savings. You can use the Annual Percentage Rate of Charge (APRC) to help you compare deals or, better yet, speak to one of the remortgaging specialists we work with for a whole-of-market comparison.


Discharging a mortgage in Scotland

In Scotland, when you arrange a mortgage you sign a document called a ‘standard security’. Your mortgage lender then sends the security deed to the Registers of Scotland for adding to the Land Register (or Sasine Register if applicable).

If you have paid off your mortgage or sold your property, you will need to discharge your mortgage from those registers. It is wise to do so as soon as possible to avoid any issues with selling your property, taking out a new mortgage or passing the property on to someone in your will.

Do I need a solicitor to discharge my mortgage in Scotland?

This is a question we are often asked, and while it is recommended that a solicitor the discharge process, for some transactions it is possible for owners to submit the deed themselves.

The mortgage discharge fee in Scotland is £50 for digital applications and £60 for paper applications. If your application is rejected you will be charged £30 so while instructing a solicitor may incur additional costs, they will be able to guide you through the process.


Where can I find a mortgage calculator for properties in Scotland?

Online calculators for mortgages in Scotland should only act as a guide - rate tables do not indicate which deals you’ll qualify for as they do not factor in your individual circumstances, so getting the best deal for you is difficult unless you understand the market. 

Every lender is different and rates change regularly so for the best, up-to-date rates and deals, make an enquiry and we will put you in touch with one of our specialist Scotland mortgage brokers.


Can I get mortgage help in Scotland?

If you’re struggling to pay an existing mortgage in Scotland, the Scottish government’s website is a useful resource. There, you can find access to legal aid as well as the Home Owners' Support Fund and Support for Mortgage Interest (SMI) schemes.

Furthermore, the experts we work with might be able to help by offering bespoke advice and suggesting products could potentially make things easier for you, including a remortgage or a secured loan.


Make an enquiry


Can you get low income mortgages in Scotland?

Yes, there are a range of mortgage options for borrowers on low income and they are generally the same in Scotland as they are anywhere else in the UK.


Why speak to an expert Scotland mortgage broker 

We’ve helped over 82,000 people find the right mortgage, even buyers who have previously been declined for a mortgage or have adverse credit history. 

Our customers consistently rate us 5 stars on Feefo, largely due to our high levels of service, but also because we offer offers a 5-star service with access to expert brokers who:

  • Are whole of market.
  • Can offer bespoke advice to customers buying in Scotland.
  • Have a working relationship with all lenders
  • Already know the lenders to go to as they have successfully arranged mortgage loans in all parts of Scotland.
  • Are OMA Accredited advisors.
  • Have completed a 12 module LIBF accredited training course.


Speak to an expert on mortgages in Scotland

If you require mortgage help in Scotland and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0800 304 7880 or make an enquiry.

Then sit back and let us do all the hard work in finding a Scottish mortgage broker with the right expertise for your circumstances. We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.


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Updated: 12th July 2019
OnlineMortgageAdvisor 2019 ©

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The info on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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