£1,400,000 mostly interest-only mortgage for client with income from four companies
Trinity Financial recently arranged a £1,400,000 mortgage for a client using the income from four of his companies.
He had found a large property to buy and was keen to secure a mortgage because his family were living overseas.
He asked us to find a mortgage where the monthly repayments were as low as possible and most of the loan was on interest-only. He had spoken to a bank and they had sent him terms, but he wanted a larger loan and a cheaper rate.
Solution
Trinity’s broker approached the £1 million+ mortgage team at a high street bank and after discussing the client’s financial situation they agreed to provide an 80% loan-to-value mortgage.
This meant there was £1,350,000 (75% ltv) of the mortgage on interest-only and £90,000 (5% ltv) on capital repayment.
The bank worked out the maximum loan size using the profits before tax, plus the director's salary.
The lender offered a very competitively priced two-year fix at 2.04% with a £1,999 arrangement fee and the mortgage offer was produced within ten days.
Case details
Property type: Three-bedroom house
Value: £1,800,000
Mortgage: £1,440,000
Rate: 2.04% until 30/11/2021
Reversion rate: The bank’s standard variable rate, currently 5.20%.
The overall cost for comparison is 4.9% APRC representative.
Lender’s arrangement fee: £1,999
Mortgage term: 25 years
Repayment type: 70% interest-only and 5% capital repayment
Loan-to-value: 75%
Early repayment charge: 3% of the loan in year 1, 2% in year 2.
Overpayments: 10% per annum
Representative example: A mortgage of £1,440,000 payable over 25 years, initially on a 2.04% fixed rate for 25 months and then on a variable rate of 5.20% for the remaining 23 years, would require 25 monthly payments of £2,686.74 followed by 275 monthly payments of £6,385.79. The total amount repayable would be £3,174,845 and a £1,999 arrangement fee. The overall cost for comparison is 4.9% APRC representative.
The actual rate available will depend on your circumstances. Please ask for a personalised mortgage illustration.
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