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Trinity Financial recently arranged a mortgage for a couple helping their son to get on the property ladder.

They had struggled to find a lender to provide them with a large enough mortgage on an interest-only basis using all three of their incomes. To add to the complication, they also wanted a joint borrower sole proprietor mortgage.

As many banks and building societies limit the mortgage term for older applicants, our clients requested the longest term on an interest-only basis.

Solution

Trinity’s broker contacted a bank offering a combination of the requirements to help our clients secure a large enough mortgage.

The lender was happy to take the mortgage up to the parents 80th birthday and use their pension and investments as a repayment vehicle for an interest-only mortgage.

The bank had a leading five-year fixed rate, took three incomes and offered joint borrower sole proprietor.

As the mortgage was on interest-only, there was a facility to overpay 10% of the loan amount per annum without charge. 

Case details

Property type: Three-bedroom house

Value: £750,000

Mortgage: £560,000

Rate: 2.24% for five-years

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

The overall cost for comparison is 3.5% APRC representative.

Lender’s arrangement fee: £999

Mortgage term: 14 years

Repayment type: Interest-only

Loan-to-value: 75%

Early repayment charge: 5% of the loan in year 1, 4% in year 2, 3% in year 3, 2% in year 4 and 1% in year 5.

Overpayments: 10% per annum

Representative example: A mortgage of £562,000 payable over 14 years, initially on a 2.24% fixed rate for 60 months and then on a variable rate of 4.25% for the remaining 9 years, would require 60 monthly payments of £1,051.86 followed by 108 monthly payments of £1,995.73. The total amount repayable would be £843,009 and a £999 arrangement fee. The overall cost for comparison is 3.5% 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 mortgage

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