£900,000 remortgage with capital raising to swap to interest-only and pay down buy-to-let
Trinity Financial recently arranged a £900,000 residential remortgage to help a client restructure his debt.
The mortgage rates on his main residence and buy-to-let were coming up for renewal and he wanted arrange new deals. His monthly repayments on his home were higher than he wanted because they were on full capital repayment over a short term, so he planned to switch it to interest-only.
Our client asked us to remortgage his buy-to-let loan to another lender as the deal they were offering him to stay was uncompetitive. However, as the rental income was not sufficient to secure enough funds to repay the mortgage, he needed to release some equity from his home and bring the loan-to-value to 60%.
The intermediary lending arm of a high street bank agreed to provide the £900,000 mortgage including £300,000 of capital raising to pay off the buy-to-let. They agreed a mortgage on one of the bank's specifice interest-only rates and produced an offer in two weeks. The client then repaid a lump sum off his buy-to-let mortgages and switched to a cheaper deal.
The intermediary lending arm of a high street bank agreed to provide the £900,000 mortgage including £300,000 of capital raising to pay off the buy-to-let. They agreed a mortgage on one of the bank's specifice interest-only rates and produced an offer in two weeks. The client then repaid a lump sum off his buy-to-let mortgages and switched to a cheaper deal.
Case details
Value: £1,200,000
Mortgage: £900,000
Rate: 1.92% fixed rate until 31/03/2021
Reversion rate: The bank’s standard variable rate currently 4.24%.
The overall cost for comparison is 4.03% APRC representative.
Lender’s arrangement fee: £0
Mortgage term: 25 years
Repayment type: Full interest-only
Loan-to-value: 75%
Early repayment charge: Yes - for two years
Overpayments: Up to 10% per year without charge
Representative example: An interest mortgage of £900,000 payable over 25 years, initially on a 1.92% fixed rate for two years and then on a standard variable rate (currently 4.24%) for the remaining 23 years, would require 24 monthly repayments of £1,440 followed by 276 monthly repayments of £3,180. The total amount repayable would be £1,812,240.00 made up of the loan amount, plus interest and £0 (product fee), £0 (final repayment charge), £35 (completion fee). The overall cost for comparison is 3.54% APRC representative.
The actual rate available will depend on your circumstances. Please ask for a personalised mortgage illustration.
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