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Our clients asked for help to secure a £1 million buy-to-let mortgage against their existing home. They wanted to purchase a new main residence with cash.

As the house was unencumbered, the clients liked the idea of buying their new home while retaining the old one for investment purposes.

Even though the house was in a great location, the anticipated rental income was not enough to support the mortgage. 

Solution

Trinity’s broker approached a challenger bank offering let-to-buy mortgages, allowing them to release funds from their home while letting it out.

As the rental income generated by the property was not enough to fund the full loan amount, the bank took their pension and investment income to boost the mortgage loan size.

The bank had a generous interest-only policy and was happy to offer a 15-year term. 

Case details

Property: House in central London

Value: £2,000,000

Mortgage: £1,200,000

Rate: 2.99% fixed for two years

Reversion rate: The bank’s standard variable rate, currently 4.25%.

The overall cost for comparison is 4.12% APRC representative.

Lender’s arrangement fee: £999

Mortgage term: 15 years

Repayment type: Full interest-only

Loan-to-value: 60%

Early repayment charge: 2% until 01 June 2018, 1% until 01 June 2019.

Overpayments: Up to 10% per annum without charge.

Representative example: A mortgage of £1,200,000 payable over 15 years, initially on a fixed rate for 24 months at 2.99% and then on a variable rate of 4.25% for the remaining 13 years, would require 24 monthly repayments of £2,992.49 followed by 156 monthly repayments of £4,253.54. The total amount repayable would be £1,936,950.68 made up of the loan amount, plus interest (£735,371.68) and fees of £999. The overall cost for comparison is 4.12% APRC representative.

The actual rate available will depend on your circumstances. Please ask for a personalised mortgage illustration.

Call Trinity Financial on 020 7016 0790 to release funds from your residential property.

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