£700,000 mostly interest-only mortgage for banker buying second home to occasionally let on Airbnb
Our clients asked for help buying a second home they could use as a weekend retreat, while also listing it on Airbnb to help cover operating costs.
They already had a mortgage on their primary residence and had two children in private school. They also wanted to put down the smallest possible deposit for the property while securing a competitively priced rate.
What did they do for a living?
Investment banker and homemaker.
Did they have a complex situation?
The primary income earner received a high base salary plus bonuses, but the couple also had significant expenses. They had savings and investments.
Why did they need our help?
They wanted us to find them a lender happy to allow them to stay in the house while letting the property for a set number of days per year. Ideally, a few months.
Did you struggle to find a lender?
No. Our broker chose a large bank because its policy allowed homes to be let through on Airbnb for up to 90 days each year. The bank also allowed us to use an applicant's investments/savings to offset school fees, improving affordability. This meant it was possible to borrow £700,000 toward the £840,000 property.
Was the mortgage on interest only?
Part interest only and part capital repayment. 75% of the mortgage was interest-only, so a portion was repaid each month. The mortgage was taken out over a 25-year term, with the sale of the property used as the interest-only repayment vehicle.
Was the rate particularly good?
A two-year fixed rate priced just over 4%. To qualify for this competitively priced rate, our clients were required to make a 15% deposit.
Where did they get our details from?
Existing clients. We arranged their previous mortgage.
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The information contained within was correct at the time of publication but is subject to change.
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