£1.5 million Surrey property purchase with interest-only mortgage, ported rates and ringfenced school fees

Client situation

Our client was purchasing a new home in Surrey for £1,800,000 and required a mortgage of £1,500,000, equivalent to just under 85% loan-to-value.

The client was 50 years old and worked as the Chief Operating Officer of a large firm, a role they had held for five years. They had a strong income profile, including an annual bonus and a long-term incentive plan (LTIP), but the case required careful structuring because of affordability pressures caused by school fees.

Mortgage required

The client wanted to keep their existing competitive mortgage rates from a large high street bank by porting them across to the new property. The mortgage was structured as:

This gave the client a flexible part interest-only, part repayment mortgage while preserving their existing lower fixed rates.

The challenge

Although the client had a strong senior executive income, the affordability assessment was tight. The main issue was the school fees, which reduced the maximum mortgage the lender was prepared to offer.

The client also received a long-term incentive plan, but this had only paid out once. Most lenders want a longer track record before using this type of income fully for mortgage affordability. As a result, the LTIP could not be relied upon as standard earned income.

This meant the application needed careful presentation to the lender’s underwriting team.

How Trinity Financial helped

Trinity Financial worked closely with the lender to explain the client’s full remuneration package, career position and future income potential.

Although the lender would not use the LTIP directly as income because it had only paid out once, the underwriter agreed to apply discretion. The LTIP was used to cover the school fees, meaning the school fee commitment did not have to be included in the standard affordability calculation.

This improved the affordability position and allowed the client to secure the mortgage they needed.

The result

The client was able to proceed with the £1.8 million Surrey purchase using an 85% loan-to-value mortgage. They successfully ported their existing fixed rates of around 3.80% and around 4.3%, while topping up the additional borrowing on a new 2-year fixed rate of just under 4.85%.

The final mortgage provided a useful balance between interest-only and repayment borrowing, while keeping monthly payments more manageable.

Why this case was unusual

This case shows how important lender choice and underwriting presentation can be for high-earning professionals with more complex income structures.

Many senior executives receive income through a mix of salary, bonus, share awards, deferred compensation and long-term incentive plans. Not all lenders assess these income streams in the same way, and some will take a more flexible view than others.

It also shows that school fees can have a major impact on mortgage affordability, particularly for larger loans. In the right circumstances, some lenders may be willing to apply discretion where there is clear evidence that future bonus or LTIP income can reasonably cover these costs.

Speak to a Trinity Financial adviser today

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The information contained within was correct at the time of publication but is subject to change. It is for general information purposes and is not advice.

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