Service charge loans

Terms and conditions

Conditions

• you must be a Southwark Council Leaseholder
• all Leaseholders on the property title must be applicants and will be liable for the loan
• the Leaseholder cannot be a company
• the loan may be granted only in respect of service charges for repairs and improvements
• there is sufficient equity in the property to secure the loan
• the borrower(s) provides details of current mortgages and charges on their property
• all lenders and other interests on the property title consent to the charge being registered against the property
• the borrower(s) provides the council with details of income and expenditure
• in cases of hardship due to a medical condition, the borrower will need to supply a medical document of their condition from a qualified medical professional
• the borrower(s) consents to us contacting their mortgage provider and that we may perform credit and affordability checks on them

Terms

• the loan will be secured by a legal charge on the borrower’s property 
• Repayment loans will be repayable by monthly instalments of both capital and interest over the duration of the contract 
• the loan will also be repayable upon the death of the leaseholder (or last surviving leaseholder in the case of joint purchasers), the sale of the property, or re-mortgage 
• loans for exceptional hardship (Lifetime i.e. deferred repayment) will be repayable upon the death of the leaseholder (or last surviving leaseholder in the case of joint purchasers), the sale of the property, or re-mortgage 
• the rate of interest will be variable and will track the Bank of England base rate 
• Resident repayment discretionary loans the interest rate is 2.5% above the base rate of the Bank of England 
• Non-Resident repayment discretionary loans the interest rate is 4% above the base rate of the Bank of England 
• 'Voluntary' Lifetime Discretionary loans for exceptional hardship, the interest rate is 2% above the base rate of the Bank of England 
• the borrower will pay a fee of £747.00 to cover administration and legal fees to complete the mortgage deed; 
• the borrower may repay the loan in full at any time without incurring penalties 
• at the council's discretion, the borrower may make additional capital payments from time to time so long as these exceed £100.00 per payment; these will not be capitalised unless we have written instructions to do so 
• should the borrower wish to add additional service charges to the loan, they'll have to go through the application process again; if they're granted additional funds, an additional administration & legal fee is required 
• the borrower will pay a redemption fee which is currently £136.50 (but will vary over time) on final settlement of the loan and all further advances, if any 
• Postponements are at the Council’s discretion. 

Application fee: £747.00 

Interest rates:

• Resident Repayment Discretionary loans: 2.5% above the Bank of England base rate. 
• Non-resident repayment Discretionary loans: 4% above the Bank of England base rate. 
• 'Voluntary' Lifetime Discretionary loans for exceptional hardship: 2.0% about the Bank of England base rate. 

Redemption fee: £136.50 

Page last updated: 13 March 2024