£1.5 million mortgage at Bank of England Bank Rate plus 2.25% (2.75% payment rate, APR 3.1%* - the overall cost for comparison)

MORE

Proposition

Our client wished to purchase a new main residence in Berkshire for £1.37 million for which he required a total new mortgage facility of £1.5 million for the purchase, stamp duty and property improvements. He wished to retain two existing properties (one, the main property, worth £2.25 million, with a £600,000 tracker mortgage, and another worth £850,000, with no mortgage). The current main property will be let for £9,500 per month to private tenants and the £850,000 property is already let.

Client profile

The client is a company chairman in his fifties, with multiple income streams (salary, bonus, pension, dividend, rental, investment and private consultancy). He has very significant net assets for which he was able to provide good visibility.

Solution

Our first job was to move the existing £600,000 tracker mortgage to the new property. This avoided potential early repayment charges (ERCs) and ensured that the competitive base rate tracker deal continued. Then a special rate was negotiated with a private bank at 2.25% over base rate (meaning a payment rate of 2.75% and APR of 3.1%* - the overall cost for comparison) for the term of the £1.5 million loan, to be secured against the two existing properties (at a combined loan to value of under 50%).

Considering these houses were both to be let, the client was delighted with a pay rate of 2.75% with no ERCs to retain total flexibility. The mortgage interest could also be offset against the rental income for tax efficiency. As a 50% taxpayer it was highly advantageous to secure the larger loan against the let houses. The client agreed for the private bank to manage some existing equity investments which resulted in a lower rate being offered. The client will redeem both interest only loans in due course when he decides to sell part of an investment portfolio. With this solution he can time the share sales at a better moment in the stock market cycle.

Fees

The client paid an arrangement fee of £7,500 (0.5% of the £1.5 million loan amount).

 

*APR (the overall cost for comparison) calculation based on a 5 year term, interest only mortgage with £7,500 arrangement fee, legal and valuation fees of £5,000. The actual rate available will depend on your circumstances. Ask for a personalised illustration.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

© Private Finance Limited, 2019. Private Finance provides independent mortgage advice and arranges individual mortgage solutions for clients. Private Finance is a trading style of Private Finance Ltd, 29 Lincolns Inn Fields, London, WC2A 3EG, registered in England no. 3855776 and its Appointed Representatives. Private Finance Limited is authorised and regulated by the Financial Conduct Authority (FCA registration number 310566).

Private Finance Ltd is rated 4.95 stars by Reviews.co.uk based on 731 merchant reviews

4.95 / 5 Rating
731 Reviews
I didn't expect Conor at Private Finance to be able to find a mortgage solution for my circumstances. I was wrong. I now have a mortgage exactly suited to my needs. Suffice to say I am very pleased with the service provided by Private Finance and Conor in particular. I would have no hesitation in recommending their services to others.
Fantastic service, Simon sorted me out with exactly what I wanted and at a better interest rate than I could get else where. Would recommend their service to anyone. Hopefully I get the chance to use this company again. Thank you
The service from Donovan was excellent. As we came into this as first time buyers, Donovan put us at ease at all times, was very responsive and and provided ample advice. He was a calming influence on the whole house buying process. The service was silky smooth from start to finish! I would not hesitate to recommend Donovan and Private Finance.
The British Mortgage Awards 2015 back to top