Banker switches £1.15 million mortgage from capital repayment to interest only to reduce costs

Trinity Financial recently arranged a remortgage for an investment banker keen to lower his monthly costs.

As his existing fixed rate on his £1.15 million mortgage was ending, and the repayments were going to rise significantly, he wanted to act and lower his monthly costs.

Rather than sticking with the rate we initially secured for him six months ago when he was eligible to complete a rate switch with his existing lender, he decided to remortgage to another bank and take the whole mortgage on interest only.

Our client opted for a two-year fixed rate because he thought rates would come down over the near term. He did not want a five-year fix because he felt they were too expensive.

How much did his repayments come down?

By switching from capital repayment to interest only his payment came down by around £1,300 a month.

He understood that by taking interest only, he would end up paying more over the life of the mortgage, although he had a plan to make lump sum overpayments using his annual bonuses.  

Did he have a complex situation?

He worked in financial services as an investment banker and had consistently received pay rises and annual bonuses.

He planned to review his financial situation in two years and use the lender's 10% annual overpayment facility.

Why did he need our help?

Our clients wanted to remortgage the whole mortgage onto interest only rather than taking part of the mortgage on capital repayment. He wanted us to find him a provider with the most competitive rates and generous acceptance criteria.

Trinity Financial's broker arranged for the mortgage to be switched to a bank offering up to 75% loan-to-value mortgages to borrowers earning over £250,000.

Call Trinity Financial on 020 7016 0790 to secure a mortgage or book a consultation 

The information contained within was correct at the time of publication but is subject to change.

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