Trinity Financial recently arranged a £1,200,000 remortgage for a client using the funds to pay off his buy-to-let mortgage.
After speaking to his accountant, he decided to release equity from his main residence and pay off the buy-to-let mortgage because of the recent tax changes. Working as a banker he received a large basic salary and bonus.
He asked Trinity’s broker to secure the lowest possible interest-only mortgage to pay off his existing loan and raise additional funds. We approached a large high street bank offering £1 million+ mortgages at low rates.
Our client decided to take a two-year fix rather than a longer-term deal because he thought it was unlikely rates would rise over the foreseeable future.
The lender normally offers interest-only up to 65% loan-to-value but can go higher on a case-by-case with underwriter approval.
Rate: 1.49% two-year fix
Reversion rate: The bank’s standard variable rate currently 3.94%.
The overall cost for comparison is 3.61% APRC representative.
Lender’s arrangement fee: £1,499
Mortgage term: 20 years
Repayment type: Interest-only
Early repayment charge: Yes - for two years
Overpayments: Up to 10% per year without charge
Representative example: An interest mortgage of £1,190,000 payable over 20 years, initially on a 1.49% fixed rate for two years and then on a standard variable rate (currently 3.94%) for the remaining 18 years, would require 26 monthly repayments of £2,701.74 followed by 214 monthly repayments of £4,804.67. The total amount repayable would be £1,948,444 made up of the loan amount, plus interest (£756,945) and £1,499 (product fee), £0 (final repayment charge), £30 (completion fee). The overall cost for comparison is 3.61% 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 secure a £1 million+ mortgage