Changes to Spanish Lending Criteria

To reflect the changes in market conditions, the Management team have made the following changes to the Spanish Residential Lending Policy. The changes will take effect from 23 June 2009. Any previously agreed AIP's will be underwritten under the old criteria providing the fully packaged case is submitted to head office by Friday 26 June 2009.

Interest Only
The Society has withdrawn from the interest only market and only applications on a capital and repayment basis will be considered.

LTV
Introduction of maximum loan to value of 50% for flats / apartments, the maximum loan to value of 65% will be maintained for villa and terrace properties.

Property
Lending will be limited to flats / apartments where the building is no greater than 3 storeys high.

Maximum Age
The maximum age is 65 (at the end of the mortgage term), however, applications may be considered up to a maximum age of 75 (at the end of the mortgage term) where the applicant can demonstrate the ability to service the loan by continued employment or pension income.

Income Multiples
Single income multiple to be reduced from 5x to 3.25x;
Joint maximum income multiple to be reduced from 4.25x to 3x.

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