Property and Equity Requirements
For a £300,000 secured loan, the equity in your property must be substantial. At 75% combined LTV, the sum of your first mortgage balance and the £300,000 second charge cannot exceed three-quarters of your property's current market value. The property valuation carried out by the lender's appointed surveyor is binding — if it comes in lower than the market value you expect, the maximum loan offered will be reduced accordingly.
As a worked example: if your property is worth £900,000 and your existing mortgage balance is £300,000, total secured debt would be £600,000 at a CLTV of 66.7 per cent — within a 75% cap, leaving headroom. If the outstanding mortgage were £400,000, total debt rises to £700,000 at 77.8% CLTV — above a 75% threshold, potentially triggering a rate increase or reducing the maximum advance to maintain the CLTV limit.
A small number of specialist lenders, including some who lend through packager intermediaries, will consider CLTV up to 80 or 85 per cent for borrowers with clean credit and strong income at this loan size. These products carry higher rates — typically 1 to 2 percentage points above the equivalent 75% CLTV product — and stricter income requirements to compensate for the reduced equity buffer.
Property condition and type also matter. Lenders at this level typically require the property to be in a habitable condition, of standard or acceptable non-standard construction, and not subject to any outstanding planning enforcement notices or structural defects identified in the survey. Properties in certain geographical areas may face additional scrutiny from some lenders.
Income and Affordability at £300,000
The monthly repayment on a £300,000 secured loan over 20 years at 9% is approximately £2,698. At 10%, that increases to around £2,895. For most lenders, this level of repayment — added to an existing mortgage payment — requires a total household income in the region of £110,000 to £150,000 or more, depending on other expenditure and the size of the first mortgage. Income requirements are not prescribed as a fixed multiple; they emerge from a full affordability assessment that lenders conduct in line with FCA responsible lending rules.
Lenders conduct stress testing, applying a notional rate increase of typically 2 to 3 percentage points above the contract rate to check that repayments remain affordable. On £300,000 at 9% + 3% stress = 12%, the stressed monthly repayment over 20 years is approximately £3,302. This stressed figure must be affordable within your income and expenditure profile for the application to proceed.
Pension income, rental income, dividend income, and other non-employment sources can all be included by specialist lenders, subject to evidence and longevity requirements. A director taking a low salary and high dividends from their limited company — a common tax-efficient structure — is a profile that specialist secured loan lenders understand well, whereas high-street lenders often apply punitive haircuts to dividend income or exclude it altogether.
Where income has recently increased — for example following a promotion, a move to self-employment after a period of employment, or the start of a profitable rental portfolio — lenders may apply additional scrutiny to satisfy themselves that the income is sustainable. Projections or forward-looking figures are generally not accepted; lenders require historic evidence, usually two to three years.
