£1 million remortgage for trader to complete refurbishment works
Trinity Financial recently arranged a residential interest-only remortgage for a partner in an equity investment firm.
He was refurbishing a buy-to-let property and required additional cash to complete the work and recoup his savings.
He had been working at an investment firm for two years and was about to submit his second year's accounts. He wanted an early repayment charge free mortgage because he was not sure if he would sell the property over the next year.
Solution
Trinity’s broker had a more limited panel of lenders to choose from because our client technically had one year’s accounts, but this was not a problem.
He approached a large bank offering highly competitively priced rates with a generous interest-only policy. Our contact at the lender was happy to agree the case over the phone subject to the required documentation.
The lender produced a fast mortgage offer enabling the client to complete the work and let his property.
Case details
Property type: Detached house
Value: £3,500,000
Mortgage: £1,000,000
Rate: 1.42% until 31 October 2021
Reversion rate: The bank’s standard variable rate, currently 4.24%.
The overall cost for comparison is 3.9% APRC representative.
Lender’s arrangement fee: £1,499
Mortgage term: 25-years
Repayment type: Capital repayment
Loan-to-value: 28%
Early repayment charge: Until 31 October 2021
Overpayments: 10% per annum allowed
Representative example: A mortgage of £1,000,000 payable over 25 years, initially on a 1.42% fixed rate until 31 October 2021 and then on a variable rate of 4.24% for the remaining 23 years, would require 26 monthly interest-only payments of £1,185 followed by 274 monthly payments of £3,538. The total amount repayable would be £2,001,896 made up of the loan amount plus interest £1,000,397 and £1,499 arrangement fee. The overall cost for comparison is 3.9% APRC representative.
The actual rate available will depend on your circumstances. Please ask for a personalised mortgage illustration.
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