Our clients were seeking to remortgage their £5,000,000 residential property on an interest-only basis to release capital in support of wider family objectives, including helping their children onto the property ladder and assisting with long-term care arrangements for elderly parents.
While the clients had a strong combined earned income of approximately £80,000 per annum, this alone was insufficient to support the required £1,500,000 borrowing requirement under conventional lending models, equating to a loan-to-income ratio of almost 19x.
However, the clients also held substantial pension and investment assets offshore, representing significant overall financial strength that was not being recognised through standard affordability assessments used by mainstream lenders.
The property itself presented several additional lending challenges.
The residence extended to approximately 50 acres and included a grazing licence arrangement with a local farmer. In addition, the title included two adjoining cottages with separate utilities and council tax arrangements, which had previously been let to unrelated third parties.
The combination of
placed the property outside the lending policy of many mainstream mortgage providers.
There were two primary challenges to overcome:
Where most high street lenders would rely solely on earned income multiples, the chosen lender adopted a more holistic underwriting approach, taking full account of the clients’ wider asset position, including pension and investment holdings, despite being offshore.
Importantly, these assets were monetised for underwriting purposes, acknowledging that income could be drawn from them if required, without forcing liquidation or creating unnecessary tax consequences.
Despite the property’s complexity and the unconventional affordability profile, a £1,500,000 interest-only residential mortgage was successfully secured on highly competitive terms, with pricing only slightly above equivalent mainstream rates available at the time.
The completed structure provided the clients with the flexibility to release capital while maintaining future downsizing options and preserving overall liquidity.
This case demonstrates how asset-based underwriting can unlock residential mortgage solutions where traditional income-led assessments fall short.
For clients with complex properties or substantial non-earned assets, the right lending structure and underwriting approach could provide access to competitive finance solutions that may not be available through mainstream lenders.
If this scenario resonates with you or you’re seeking personalised mortgage advice for another situation, please get in touch — we’d be happy to see how we can help.
Call our team today on 0800 652 0971 or email info@privatefinance.co.uk.
Disclaimer:
The information presented in our case studies is intended for illustrative and marketing purposes only. Some case studies may be based on multiple enquiries or hypothetical scenarios to demonstrate typical processes or outcomes. Not all case studies represent completed business transactions, and the inclusion of a case study does not imply that the business was successfully concluded. Please be aware that Private Finance is not a tax advisor, and this page does not constitute tax advice. The Financial Conduct Authority does not regulate commercial finance and some forms of buy-to-let mortgages.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
