Precise Mortgages Secured Loans

Precise Mortgages eligibility criteria

Precise targets clean to near-prime credit borrowers. Acceptable credit: no CCJs under £300 in last 24 months, no defaults under £150 in last 12 months, satisfied CCJs over £500 acceptable from 24 months ago, no arrears on any secured credit in last 12 months, no active DMPs, discharged bankruptcy over 6 years ago. Slightly tighter on very recent adverse than Pepper Money but broader than Shawbrook Bank on historic items.

Minimum age 21, maximum age at end of term 75 (or 80 for retired applicants with pension income). Minimum income £15,000 sole, £22,500 joint. Precise’s standout feature is income assessment flexibility for limited company directors: salary + dividends, salary + net profit, or (uniquely) salary + retained profits are all accepted — with 2 years of accounts evidencing consistent performance. Contractors on day rates need 12 months’ history. Self-employed with 2 years SA302s is standard; 1 year acceptable for established professions (doctors, dentists, solicitors).

Property criteria: minimum value £100,000, standard construction preferred, leasehold minimum 85 years. Maximum LTV 85% on residential for clean credit, 75% for near-prime, 75% on consumer BTL. Precise accepts some non-standard properties with acceptable RICS reports — including steel-frame, system-built and flats above commercial premises — broader than Shawbrook on property edge cases. Scotland, Wales and England covered; Northern Ireland not served.

Precise rates and a worked example

Precise residential second charge rates start at 7.49% APR for clean credit at 65% LTV, rising to 10.49% at 85% LTV. Near-prime tier runs 9.49% to 12.49%. BTL second charges start at 8.49% APR. Rates are fixed for 2, 3 or 5 years then revert to Precise Standard Variable Rate (currently around 8.50%).

Worked example: £60,000 second charge for a limited company director consolidating £40,000 business credit card debt and funding £20,000 home improvements. 15-year term at 8.99% APR fixed 5 years. Monthly payment: £608.52. Total cost over 15 years at constant reversion rate: £109,533. Total interest: £49,533. Completion fee 1.25% (£750) added to loan. Using retained profit in affordability assessment — Precise accepts £45,000 net retained earnings in addition to £25,000 salary, giving £70,000 total qualifying income rather than £25,000 salary only.

Precise ERC structure: 4% year 1, 3% year 2, 2% year 3, 1% year 4, nil from year 5. Overpayments up to 10% per year of outstanding balance allowed without ERC. Completion fee of 1.25% is typically added to loan rather than paid upfront. Total cost comparison (APRC) is the right metric for lender comparison — Precise APRC on the above example is approximately 9.3% versus headline 8.99%, with fees contributing 30 basis points.

Precise application process for complex income

Precise is broker-only and particularly well-suited to brokers with self-employed and limited company director case experience. Applications start with a fact-find, soft search and Decision in Principle, typically within 24 hours. For limited company director applications, Precise expects detailed income evidence from day one: 2 years of certified company accounts, 2 years SA302s and Tax Year Overviews, 3 months of company bank statements confirming trading activity, 3 months of personal bank statements showing salary and dividend receipts.

Precise’s underwriters are experienced in assessing limited company affordability. The key assessment decision is which income figure to use: salary + dividends is the conservative starting point; salary + net profit is used where dividends are artificially low for tax efficiency; salary + retained profits is used (rarely but sometimes) where net profit has been held in the company for working capital or reinvestment. Each method requires different documentation and justification — a broker experienced with Precise knows which to recommend.

Valuations use Hometrack AVM for clean cases below 75% LTV and £500,000 property value; physical inspection above. Legal work is handled by Precise’s panel solicitor. First lender consent via Deed of Postponement. Total timeline from DIP to completion: typically 4 to 6 weeks for clean residential cases, 5 to 7 weeks for complex limited company or BTL cases requiring physical valuation.

Precise vs Shawbrook vs UTB for self-employed

The three PRA-supervised specialist banks — Precise, Shawbrook and UTB — all compete for self-employed and contractor cases. Each has specific strengths and weaknesses that matter for particular borrower profiles.

Precise is the first choice for limited company directors using retained profits or net profit in affordability — a strategy that can increase borrowing capacity by £50,000 to £150,000 versus salary-plus-dividends only. Shawbrook typically wins on rate for pure PAYE or simple self-employed cases. UTB is competitive on contractors with shorter histories. A broker experienced with all three should soft-search each before hard search to find the best offer.

PRA supervision and OSB Group backing

Precise Mortgages operates as a brand of Charter Court Financial Services Limited, which is part of OneSavings Bank plc (OSB). OSB is a fully licensed UK bank dual-regulated by the PRA and FCA. OSB merged with Charter Court Financial Services in 2019, creating a combined group with over £25 billion in loans. OSB is listed on the London Stock Exchange (ticker: OSB) and reports quarterly to the market on financial performance.

OSB Bank savings products (fixed-term bonds, notice accounts, easy access ISAs) are FSCS-protected up to £85,000 per person per institution. Kent Reliance Savings and Charter Savings Bank are both deposit-taking brands within OSB Group. The Precise Mortgages second charge lending product is funded from OSB Bank’s retail deposits, giving it a structural funding cost advantage over wholesale-funded competitors.

As a PRA-supervised bank, OSB operates under strict capital adequacy, liquidity and resolution planning rules. The most recent Pillar 3 disclosures confirm OSB CET1 ratios well above regulatory minimums, indicating strong capital backing. Consumer protections on Precise second charge loans are MCOB-standard: ESIS, 7-day reflection, affordability assessment, FOS rights up to £430,000. Precise’s FOS uphold rate is consistently below 12% — among the lowest in the specialist second charge market.

Precise Mortgages for buy-to-let second charges

Precise is a leading BTL second charge lender, with particular strength in portfolio landlord and SPV limited company cases. Maximum BTL loan size £500,000, maximum LTV 75%, minimum property value £100,000. Interest coverage ratios: 125% for SPV limited company, 145% for personal ownership for higher-rate taxpayers, 125% for basic-rate taxpayers — aligned with PRA portfolio landlord requirements from 2017.

Precise accepts portfolio landlords with up to 20 BTL properties under standard criteria, with specialist underwriting for larger portfolios. Acceptable property types include standard BTL, HMOs up to 6 bedrooms (licensed), multi-unit blocks up to 5 flats, student lets, and — with specialist underwriter approval — holiday lets. New-build BTL accepted within 2 years of construction with satisfactory warranty.

Worked example: £100,000 Precise BTL second charge on £400,000 HMO with £200,000 first mortgage (75% LTV combined). 5-bedroom licensed HMO with £3,200/month rental income. 20-year term at 9.49% APR fixed 5 years. Monthly payment: £931.62. Rental coverage at stressed rate 11.49%: £3,200 / £1,104 = 290% — easily clears 125% SPV requirement. £100,000 capital could fund deposit on further £440,000 HMO at 75% LTV, materially expanding portfolio.

Common mistakes with Precise applications

Mistake one: limited company directors using salary-plus-dividends when salary-plus-net-profit would qualify for larger loans. Many brokers default to dividend-based assessment without exploring whether net profit would boost affordability. For retained-earning limited companies with £80,000+ annual profit, the difference can mean £100,000+ more borrowing capacity. Ensure your broker actively considers both methods and selects the one that fits.

Mistake two: submitting insufficient evidence of retained profits. Precise accepts retained profits in some circumstances but requires strong documentary support: 2 years of full company accounts (not just SA302s) signed by a qualified accountant, evidence that retention is for legitimate business purposes, and director’s confirmation that retained profits are available for distribution if needed. Weak documentation causes referral to senior underwriter and often pricing downgrade.

Mistake three: not taking advantage of Precise’s property flexibility. Precise accepts some non-standard construction types (steel frame, system-built) that Shawbrook or UTB decline. If your broker has not explored whether Precise would lend where others have declined on property type, ask them specifically. Getting the right lender matched to property characteristics can be the difference between completion and decline.

Alternatives to Precise Mortgages

For the cleanest credit standard-income cases, Shawbrook Bank typically beats Precise on rate by 10 to 30 basis points. For contractors specifically on standard day rates with no limited company complexity, UTB is often competitive and has broker-friendly processing. For borrowers above 85% LTV (Precise cap), no specialist lender currently lends — a full first charge remortgage may be the only route.

For borrowers with moderate adverse credit outside Precise criteria, Pepper Money is often the best next step at 1% to 2% higher APR. For heavier adverse (active DMP, recent CCJ), Equifinance, Evolution Money or Together are the next tier. The rate step from Precise at 8% to adverse specialists at 11%+ is substantial — if you are marginal on Precise criteria, 3 to 6 months of credit rehabilitation might move you into Precise acceptance zone and save significant interest cost over the loan term.

For limited company directors, consider whether a full BTL portfolio remortgage with Paragon Bank (who specialise in portfolio landlord cases) might be more efficient than multiple Precise second charges across properties. Paragon’s portfolio product consolidates all BTLs onto single facilities with unified underwriting, which may be more efficient than individual property-level second charges. Compare total costs including fees, stamp duty implications, and tax treatment.