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Our clients asked for help to remortgage away from their current lender to lower their monthly repayments.

They purchased their property two years ago with a 20% deposit and took the £1 million mortgage on a full capital repayment basis.

As the mortgage was over a 25-year term, the monthly repayments were high at £3,800 each month.

Solution

Over the last few years, more lenders have stepped back into the interest-only market, and mortgage rates have reduced significantly.

Trinity approached a bank offering part interest and part capital repayment mortgages. By switching £750,000 of the mortgage on to an interest-only basis, the monthly repayments were reduced to £1,800 each month. £250,000 remained on a capital repayment basis.

Our client had a strategy to repay the mortgage, and they were aware there was an option to overpay 10% out the outstanding balance per annum without charge.

Case details

Property: House in Surrey

Value: £1,500,000

Mortgage: £1,000,000

Rate: 1.24% - 0.99% over the Bank of England base rate for two years.

The overall cost for comparison is 4.39% APRC representative.

Reversion rate: The lender’s standard variable rate, currently 4.74%.

Lender’s arrangement fee: £995

Mortgage term: 24 years

Repayment type: £750,000 on interest-only and £250,000 on capital repayment.

Loan-to-value: 66%

Early repayment charge: Early repayment charges for two years.

Overpayments: 10% overpayment per annum without charge.

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

For help to remortgage onto a split repayment interest-only mortgage, call Trinity Financial on 020 7016 0790.

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