Let to Buy - £615,000 loan to buy a country cottage without selling a London property

Proposition

Our clients had been looking to move from London to the country for some time. They found their ‘perfect country cottage’, on the market at £500,000 but unfortunately there was another buyer who made a cash offer at just under the asking price. The clients’ London property was valued at £550,000 with a £100,000 mortgage, but was not yet on the market.

Solution

We met the clients and they were delighted to hear that finance could be arranged quickly which would allow them to move forward with an offer. We needed to secure a total loan of £615,000 to cover the new mortgage, the existing mortgage and stamp duty.

The maximum which could be arranged on a residential mortgage was £235,000, using a flexible product which would allow the clients to reduce the mortgage without charge when the London property was sold. The rate obtained was a lifetime tracker rate of 3.19% plus Bank of England Bank Rate (currently 0.5%) giving a payment rate of 3.69%. (APR 3.8%* - the overall cost for comparison). The mortgage was for a 15 year term on an interest only basis and the clients paid a lender’s arrangement fee of £1,499. Early repayment charges apply only on full redemption of the mortgage, not partial repayment.

The rental value of the London property was £1,900pcm, which secured a Buy to Let (BTL) mortgage of £380,000 with a specialist lender. The rate obtained was a 1 year tracker rate of 4.04% plus Bank of England Bank Rate (currently 0.5%) giving a payment rate of 4.54%. (APR 5.3%* - the overall cost for comparison).The mortgage was for a 10 year term on an interest only basis and the clients paid a lender’s arrangement fee of £11,400 (3% of £380,000). Early repayment charges of 3% of the loan amount apply for 1 year.

*The Residential Mortgage APR (the overall cost for comparison) calculation based on a 15 year term, interest only mortgage with £1,499 lender’s arrangement fee, legal and valuation fees of £1,000. The actual rate available will depend on your circumstances. Ask for a personalised illustration.

*The BTL Mortgage APR (the overall cost for comparison) calculation based on a 10 year term, interest only mortgage with £11,400 lender’s arrangement fee, legal and valuation fees of £3,000. 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 4.94 stars by Reviews.co.uk based on 542 merchant reviews

4.94 / 5 Rating
542 Reviews
I would highly recommend Private Finance Ltd. Alex Weldon in particular helped us secure our first mortgage. He answered all our queries in record timing (usually within 15-30mins!) and nothing was ever too much trouble. Alex was always on the other end of the phone if needed and he made the process as smooth as possible.
Ed and Donovan are brilliant at what they do. I have used them many times now and each time they have been able to find me a great deal and handle all the complexities of my case. I would always recommend them to anyone.
Great and professional team, especially Elizabeth O'Connor, who guided me through the purchase, which was successfully completed! Highly recommended.
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