Flexi Fixed for Term FAQs

All your questions answered

General

We introduced the Flexi Fixed for Term mortgage to give your clients greater choice and flexibility as well as greater peace of mind by removing the risk of fluctuating interest rates, either as a first time buyer, home mover or a remortgager.
With our Flexi Fixed for Term mortgage your clients will pay the same monthly payment for the entire fixed term, whether that’s 11 years or 40 years, or anything in between.
At this stage, we have focused on the section of the market where we believe the greater need lies. However, at some point in the future we plan on launching a Buy to Let version of the mortgage.
Applicants must be 21 to apply for the mortgage and not be older than 70 at the end of the mortgage term.

Credit criteria

You’ll find the details of our credit criteria in the table below:

Secured Arrears	Secured Loan Arrears acceptable if older than 36 months.
Unsecured Arrears	Unsecured Credit Arrears acceptable if accounts now up to date (max status of 0 in last 24 months).
Unsecured Defaults	Defaults acceptable if older than 36 months
Communication/Insurance/Bank Account and Utility defaults	We don’t take into account Communication/Insurance defaults. Utility defaults cannot exceed £250 per application. Bank Account defaults/arrears subject to underwriter discretion.
CCJ's	Satisfied CCJ's acceptable if older than 72 months.
IVA/ Bankruptcy/Repossessions	None/not acceptable.
DMP (Debt Management Plans)	None/not acceptable.
Short Term (Pay Day) Loans	Not acceptable within last 24 months. Neither new loan nor outstanding.

Gifted deposits

Yes, we will accept Gifted Deposits as long as they are from immediate family members (parents including step-parents, grandparents and other family members such as a non-dependent child, brother, sister, uncle or aunt).
We will require a completed Donor Gift Deposit Declaration form, ID and evidence of funds. Where the donor is not a parent, step-parent or grandparent, we do require them to be a UK homeowner.

Early repayment charges (ERC's)

If your client doesn’t need the mortgage on the property anymore, for example, if they sell the property or can repay the mortgage in full (from their own funds), an ERC will not be payable.
Please note that if settling from their own funds, the source of the funds would require validation if more than £5,000. This could be in the form of bank statements or a will etc. in line with our current validation processes.
If your client wants to remortgage an ERC will be payable.
Regardless of the life circumstance, if your client has to voluntarily sell their home or move, they will not have to pay an ERC.
If your client just wants to port the mortgage to a new property, there will be no ERC to pay as, if porting is agreed, the mortgage will remain in place. If a porting application is not accepted, the customer will be able to redeem the mortgage without paying an ERC when the mortgaged property is sold and a new property purchased with an alternative mortgage. Porting is available 12 months after completion of the mortgage.
In these circumstances, there will be no ERC to pay.
If your client wants to settle their mortgage, in order to take out a new mortgage, either with another lender or with Kensington, then they will be liable to pay an ERC.
Yes, your client can make overpayments of up to 10% of the original balance per calendar year without incurring an ERC penalty.

Portability

Yes, your client may be able to port the mortgage to a new residential property, subject to them passing an eligibility assessment. Clients can apply to port no earlier than 12 months after completion of their Flexi Fixed for Term mortgage.
Yes, we will underwrite the new mortgage in the same way we would for any other mortgage application eg. we will still run credit checks, instruct a valuation and assess your client’s affordability for the new property. It is important to note that your client will still have to pay the usual fees involved in the purchase of a new property, such as conveyancing, valuation and any other fees that may apply.
These are the steps you will need to take to Port your clients Flexi Fixed for Term interest rate to a new residential property:
- Discuss with your client if they have been through the initial eligibility assessment with KMC, If not, please advise your clients to contact us to go through this by calling our customer services team on 0344 499 0011.
- If your client has already been through the initial eligibility assessment with us and were successful, they will have been supplied with a unique eligibility acceptance reference number. You will need this reference number when completing the application form.
- Your clients will need to supply us with your details so our agents can set the case up on the broker portal and gain permission to discuss the application with you. The basic data we require is:
- Once we have these, our agents will set up the case on the broker portal, you will need to login to be able to view the progress of your client’s application. The application form can be found here and will need to be completed by you for your clients.
- Please ensure you have received signed confirmation from all applicants to submit the application and their personal data for processing, then send this back to us through the broker portal with any supporting documents required.
- Once the application form has been received, we will process a Mortgage Illustration (DIP ESIS) for you and your client to review.
- If you and your client are happy to proceed, just upload the supporting documents required through the broker portal, we will then process the remainder of the application form and go through our full underwriting and affordability checks.
- If you require any additional information, please contact our BDU team on 0800 111 020.
Yes, subject to your clients passing an eligibility assessment, they can apply no earlier than 12 months after completion of their Flexi Fixed for Term mortgage, to port their existing product and balance and to borrow additional lending of £10,000 or more at a new Flexi Fixed for Term rate currently available for the combined (port + additional lending) LTV.
If we don’t agree to the new mortgage, the applicants will not be able to port their mortgage product.
The new mortgage in a porting situation will be subject to our terms and conditions applicable at the time the porting mortgage offer is issued. These may be different to the terms and conditions applicable to their existing mortgage with us.

Fees

A 0.75% gross procuration fee will be paid upon completion of a Flexi Fixed for Term mortgage. If applicable, please contact your mortgage club/network for your net amount: a total of any fees will be shown on the ESIS. Procuration fees are also paid on porting the mortgage (0.50% gross) and Additional Lending (0.30% gross).

Porting and Additional Lending are optional features of the Flexi Fixed for Term mortgage range. Clients can apply for these features no earlier than 12 months after completion.
The fees will be dependent on the Flexi Fixed for Term option your client chooses but as with all our products, there will be fee and fee free options available, and no upfront application fees.

Additional Lending

If your client would like to borrow more money, they will be able to apply for Additional Lending no earlier than 12 months after completion of their flexi fixed for term mortgage.
To do this, they will go through our Additional Lending process where we will conduct full underwriting and affordability checks for the extra amount they would like to borrow.
Your clients can borrow more money against the value of their home if:
- We only accept applications for Additional Lending for Home improvements.
- The Additional lending is secured against the property under the existing KMC charge filed with the Land registry. Additional Lending will be secured by a new charge when combined with a Port.
- Your client must meet current criteria applicable at the time of the application.
- Affordability is calculated on the total new loan amount, not just the additional lending.
- Additional Lending is only available on Repayment terms
- The term for the new lending must be at least six months shorter than the remaining term on main mortgage account. This allows time for the additional lending application to be processed, so upon completion the additional borrowing will not exceed the main account.
- Minimum Additional Lending loan amount £10,000
- Minimum Additional Lending term 5 years
- On all applications a new valuation will be required, and a valuation fee may be due (subject to product availability)
Yes, in line with our usual process, if you have submitted the application for additional lending on behalf of your client, you will receive a fee of 0.50% (gross) on any ported balance and 0.3% (gross) on any additional lending amount.
These are the steps you will need to take to apply for Additional Lending for your client:
- Discuss with your client if they have been through the initial eligibility assessment with KMC, If not, please advise your clients to contact us to go through this by calling our customer services team on 0344 499 0011.
- If your client has already been through the initial eligibility assessment with us and were successful, they will have been supplied with a unique eligibility acceptance reference number. You will need this reference number when completing the application form.
- Your clients will need to supply us with your details so our agents can set the case up on the broker portal and gain permission to discuss the application with you. The basic data we require is:
- Once we have these, our agents will set up the case on the broker portal, you will need to login to be able to view the progress of your client’s application. The application form can be found here and will need to be completed by you for your clients.
- Please ensure you have received signed confirmation from all applicants to submit the application and their personal data for processing, then send this back to us through the broker portal with any supporting documents required.
- Once the application form has been received, we will process a Mortgage Illustration (DIP ESIS) for you and your client to review.
- If you and your client are happy to proceed, just upload the supporting documents required through the broker portal, we will then process the remainder of the application form and go through our full underwriting and affordability checks.
- If you require any additional information, please contact our BDU team on 0800 111 020.
For all additional lending requests, a full valuation of the property must be carried out. Your client may be required to pay a valuation fee prior to the valuation being instructed. (Subject to product availability).
For additional lending, your clients will be subject to the existing mortgage terms and conditions when they took out their original Flexi Fixed for Term mortgage.

Transferring/remortgaging to an an alternative Kensington mortgage

In this case, your client will need to pay an ERC to settle the original Flexi Fixed for Term mortgage and choose the new product they would like to transfer to. We would then underwrite their application in the usual way.
A product fee may be payable, but this will depend on the product offering at that time.
A redemption fee will be payable on the redeemed mortgage.

Length of Fixed Term

Yes, your client can apply to increase or decrease the length of their mortgage term, so your client will need to apply to remortgage the property and we will then assess their affordability in the usual way.
Yes, there will be a fee to change the term. The fee amount will depend on the product they choose at the time and it will be subject to an ERC as detailed in their original offer.

Overpayments

Yes, your client can make overpayments of up to 10% of the original balance per calendar year without incurring an ERC penalty.
Yes, they can but they will have to pay an ERC on any amount paid in a calendar year that is over 10% of the original balance.
If your client overpays, their balance will reduce but their mortgage term will remain the same.