£850,000 remortgage on super-cheap rate without early repayment charges using bonus income
Trinity recently arranged a remortgage for a client switching from a large building society. The lender would not provide sufficient funds to carry out a large scale renovation works on his property.
He wanted to borrow an additional £200,000 to completely renovate his home and secure a low rate to minimise his repayment and without early repayment charges.
Our client was employed and earned a generous salary but he received an annual bonus, and he needed all of it to be used to meet the affordability calculations. As the most recent bonus was bigger than the one he had last year, he required a flexible lender.
Solution
Trinity’s broker approached the intermediary lending arm of a leading building society providing generous acceptance criteria and a range of early repayment charge free super-cheap discounted variable rates.
He spoke to a specialist underwriter who agreed to provide the full £850,000 using the client's salary and latest bonus. The lender was also happy to provide the funds for the renovation after seeing the plans and receiving proof that planning permission had been agreed.
The lender provided a free property valuation and legal fees to reduce the costs of switching. The mortgage offer was produced within a week.
Case details
Value: £1,000,000
Mortgage: £850,000
Rate: 2.04% - 2.95% discount from 4.99% standard variable rate until 31/07/2021. Then, 0.74% discount from 4.99% standard variable rate until 31/07/2024 giving a pay rate of 4.25%. Then 4.99% (current rate) for the remaining term.
Reversion rate: The bank’s standard variable rate currently 4.99%.
The overall cost for comparison is 4.32% APRC representative
Lender’s arrangement fee: £495
Mortgage term: 25 years
Repayment type: Capital repayment mortgage
Loan-to-value: 85%
Early repayment charge: No early repayment charges
Overpayments: No limit on overpayments
Representative example: An interest mortgage of £850,000 payable over 25 years, initially on a 2.04% discounted variable rate until 31/07/2021 and then on a 4.25% discounted variable rate for 36 months, then on a standard variable rate (currently 4.99%) for the remaining 20 years, would require 27 monthly repayments of £3,619.34 followed by 36 monthly repayments of £4,519.34, then 327 monthly repayments on £4,809.39. The total amount repayable would be £1,401,101.35 made up of the loan amount, plus interest of (£550,243.85) and £999 (product fee), £35 (final repayment charge), £30 (completion fee). The overall cost for comparison is 4.32% APRC representative. The actual rate available will depend on your circumstances. Please ask for a personalised mortgage illustration.
Call Trinity Financial on 020 7016 0790 to secure an early repayment charge free mortgage
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