£950,000 mortgage for a £1.4 million farmhouse with 10 acres and outbuildings

Case Study: £950,000 mortgage for a £1.4 million farmhouse with 10 acres and outbuildings

Trinity Financial arranged a £950,000 mortgage for a marketing director and a doctor purchasing a £1.4 million farmhouse with approximately 10 acres of land, paddocks, outbuildings and three separate apartments.

The next-time buyers had already spoken to another mortgage broker, who had recommended Harpenden Building Society as a specialist lender. They contacted Trinity Financial to see whether our expert mortgage brokers could find a more competitively priced mainstream option with lower rates and cheaper setup fees.

Why was the mortgage more complex?

The property was very different from a standard residential house.

It included:

• A substantial period farmhouse

• Approximately 10 acres of land

• Gardens, paddocks and enclosed fields

• Extensive outbuildings

• Three separate apartments

• Additional accommodation previously rented out by the former owner

Properties with significant acreage, multiple outbuildings and separate accommodation can be more difficult to mortgage because lenders may have concerns about future saleability, commercial use or whether parts of the property fall outside their standard residential lending criteria.

In this case, the outbuildings and separate apartments were one of the main issues.

The buyers planned to use the additional accommodation as guest accommodation rather than continuing to let it in the same way as the previous owner. This helped when Trinity discussed the property with prospective lenders.

How Trinity Financial found the right lender

Trinity Financial's mortgage brokers regularly arrange finance on unusual and complex residential properties.

Over the years, our brokers have built up contacts with banks and building societies prepared to consider properties with acreage, paddocks, annexes, stables, barns and substantial outbuildings.

Rather than automatically using a specialist lender, the broker approached suitable mainstream banks and explained the property in detail before submitting the application.

A large bank confirmed it was prepared to consider the farmhouse, including the land and additional accommodation.

This allowed Trinity to arrange a £950,000 mainstream residential mortgage on the £1.4 million purchase.

Why did the clients choose a two-year fixed-rate mortgage?

The clients wanted a two-year fixed rate because they planned to reduce the mortgage balance during the initial deal period.

The mortgage included a 10% annual overpayment facility, allowing them to make substantial overpayments without incurring an early repayment charge, subject to the lender's terms.

Their plan was to use the overpayment allowance to reduce the outstanding £950,000 mortgage and then review their options when the fixed-rate period ends.

At that point, they will be able to assess where mortgage rates are and decide whether to take another fixed rate, move onto a tracker or consider another suitable mortgage structure.

For borrowers expecting to make significant overpayments, the length of the fixed-rate period and the lender's overpayment rules can be just as important as the headline interest rate.

The mortgage Trinity arranged

The clients secured a two-year fixed rate of around 4.85% with a large bank, with relatively low arrangement fees.

The main delay was arranging access for the lender's valuation rather than any issue with the clients' finances or mortgage application. 

Our brokers can often speak to lenders before a full mortgage application is submitted to establish whether the property is likely to meet their lending criteria.

Case study outcome

Trinity Financial secured a £950,000 mortgage on a £1.4 million farmhouse with approximately 10 acres of land, outbuildings and separate accommodation.

The clients obtained a 4.85% two-year fixed-rate repayment mortgage over 30 years from a large mainstream bank, providing a more competitively priced alternative to the specialist mortgage they had previously been considering.

The two-year fix also suited their longer-term strategy because they intend to use the mortgage's 10% annual overpayment facility to reduce the balance before reviewing the mortgage market again in two years.

Call Trinity Financial on 020 7016 0790 to secure a fixed or tracker rate mortgage, book a consultation, or use our appointment calendar

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.

Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage.