The couple already owned one buy-to-let investment property, aside from their main residence, and had been considering buying a second home for a while to use for weekend getaways from London. They had found a rural cottage for £510,000 which was perfect and decided to proceed to purchase. The complexities involved in the case were as follows:
- They had been wary about the costs involved in this purchase as wanted a project they could work on over time, however with the Stamp Duty cut saving them £15,000 and low mortgage rates they could now make this work.
- The couple’s capital was tied up in their buy-to-let investment, which they did not want to sell.
- The couple also wanted to keep their main residence and not increase the borrowing on this property.
Solution & lending facility
With access to every lender on the market and vast experience negotiating property finance of every kind, Private Finance’s expert brokers are equipped to find solutions to mortgage-related problems and help borrowers use their mortgages as a key financial planning tool.
The couple had a 25% deposit for the property and for the mortgage, our expert consultant was able to find the couple a lender who was able to lend the full 75% required on an interest-only basis at a rate of 1.34% on a 2-year fixed term. This lender was able to utilise the equity in the buy-to-let property, along with surplus income, to obtain the entire loan on an interest only basis and therefore minimise monthly payments, making the purchase as affordable as possible. The couple has previously struggled to find a lender who would go to this high an LTV, given the limited equity in their background buy to let and lenders' reluctancy to use their main residence as repayment vehicle.