First-time buyers secure a £950,000+ mortgage with complex income mostly on interest-only

First-time buyers secure a £950,000+ mortgage with complex income

Trinity Financial helped first-time buyers secure a large mortgage for a high-value property purchase despite having a more unusual income structure and a deposit level that restricted the number of lenders available.

The main applicant was a Chief Executive who owned a 15% share of his company. He received a PAYE salary alongside annual dividend income, which was declared through his tax return. This meant his income did not fit the standard profile preferred by some high street lenders.

The clients were also unsure how much they could afford to borrow and wanted help structuring the mortgage so their monthly repayments were as low as possible.

What made the mortgage application complex?

The clients wanted to borrow more than £750,000 at 80% loan-to-value on interest-only. This was significant because many lenders impose tighter maximum loan-to-value limits once mortgage balances exceed £750,000. Some banks would therefore have required a larger deposit.

The clients also wanted:

• A large mortgage at 80% LTV

• 75% of the mortgage on an interest-only basis

• Remaining balance on capital repayment

• A competitive two-year fixed rate

• A generous overpayment facility

• A lender willing to assess PAYE salary and dividend income

• Monthly repayments to be kept as low as possible

Our broker spoke to a number of banks to identify a lender comfortable with the loan size, deposit, income structure and interest-only requirements.

Part interest-only mortgage helped reduce the monthly payments

To keep the monthly mortgage payments lower, the mortgage was structured on a part interest-only and part capital repayment basis.

Approximately 75% of the mortgage was placed on interest only, with the remaining balance on capital repayment.

This structure can help reduce monthly costs because the borrower only pays the interest each month on the interest-only portion of the loan. The capital still needs to be repaid at the end of the mortgage term, so borrowers must have an acceptable repayment strategy.

Competitive two-year fixed mortgage secured

The mortgage was arranged with NatWest, one of the UK's largest high street banks.

The mortgage comprised two parts, both priced at a competitive two-year fix, around 4.85%, with a £1,495 product fee.

After the fixed-rate period, both parts revert to NatWest's Standard Variable Rate, currently 6.74%, unless the borrowers arrange a new product transfer or remortgage to another lender.

Trinity Financial contacts clients around six months before their existing mortgage deal is due to finish so there is plenty of time to review the available fixed and tracker mortgage options.

20% annual overpayment facility

The clients also wanted flexibility to repay a substantial amount of the mortgage if their financial position allowed.

The mortgage we arranged permits them to make overpayments of up to 20% of the outstanding balance, subject to the lender's terms and conditions.

This was particularly attractive because the borrowers wanted the lower monthly payments provided by interest only while retaining the ability to reduce the mortgage balance more quickly.

Mortgage offer issued within three weeks

Despite the complexity of the application, including the high loan amount, unusual income structure, deposit requirements and interest-only element, the mortgage offer was issued within approximately three weeks. Mortgage offers are often produced quicker, subject to the lender's processing times and the time taken to complete the property valuation. 

The clients found Trinity Financial through ChatGPT

Interestingly, the first-time buyers found Trinity Financial after using ChatGPT to research mortgage advice.

More borrowers are now using AI tools such as ChatGPT to research how much they can borrow, which lenders might accept complex income and where to find mortgage brokers experienced in arranging large or unusual mortgages.

While AI can be a useful starting point, mortgage affordability and lending criteria vary considerably between banks. Speaking to an experienced broker can help borrowers understand which lenders are most likely to accept their circumstances and how their mortgage can be structured.

Trinity Financial's brokers regularly arrange large mortgages for first-time buyers, company directors, executives and borrowers with complex income structures.

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.