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Our client asked for help to convert his current main residence onto a buy-to-let and raise additional funds to put towards the deposit for an onward residential purchase.

Many banks and building societies have tightened their rental calculations over the last year, and they are not providing such large mortgages.

The average buy-to-let calculation from the high-street lenders is 125% at 5.5% and if a property generates £2,300 rent each month they offer approximately £400,000.

Solution

Trinity’s mortgage adviser approached one of the specialist lenders providing enhanced rental calculations on selected lifetime tracker rates.

The client was happy to proceed and pay a higher arrangement fee because the bank would lend him the additional funds for the deposit to buy the new property.

The specialist lender provided a 125% at 3.99% calculation, and with £2,300 monthly rental income it could lend up to £560,000.

Case details

Property: House in London

Value: £750,000

Mortgage: £560,000

Rate: 3.99% (LIBOR + 3.61%) for life of mortgage

The overall cost for comparison is 4.13% APRC representative.

Lender’s arrangement fee: £3,995

Mortgage term: 25 years

Repayment type: Interest-only

Loan-to-value: 75%

Early repayment charge: Early repayment charges until 01 December 2019.

Overpayments: None

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

To arrange a more generous buy-to-let mortgage call Trinity Financial on 020 7016 0790.

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