Case study: 80% Loan to value on £1.6million mortgage

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Tuesday June 21, 2011

This case study demonstrates just how price competitive private banks can be. We arranged an 80% LTV £1.6 million mortgage at Bank of England Bank Rate plus 2.24% tracker – a pay rate of just 2.74% – with no ERCs. To discuss this or any other large mortgage case, please contact us.

Case profile

A client needed a mortgage of £1.6 million to help purchase a property worth £2 million at a Loan to Value ratio (LTV) of 80%. He had already asked his broker about high street bank deals, whose rates – he had read – were more competitive than those offered by private banks for £1 million mortgages. However, his broker knew that, the high street banks will not lend at 80% on this level of borrowing and that would be able to place the deal with a private bank from its extensive connections.

The solution

The client’s broker had limited experience in arranging such a large and complex loan, so referred his client to’s specialist mortgage brokers who know the private banks who would be interested in the case. The client needed to exchange on the property in two weeks in order to avoid losing his non-refundable retainer of £20,000. A bank was quickly found willing to offer a £1.625 million (81.25% LTV) mortgage at Bank of England Bank Rate plus 2.24%. The client ultimately opted to take £1.6 million as the loan amount and exchanged within his two week window. Because the deal has no early repayment charges (ERCs) the client will be able to make overpayments from bonuses and quickly reduce the loan amount outstanding.

Deal highlights

Loan amount: £1.6 million (80% LTV on £2 million purchase price)
Rate: Bank of England Bank Rate + 2.24%¹ tracker (pay rate of 2.74%)
APR: 3.3%² (the overall cost for comparison
Term: 5 years
Type: Interest only
Arrangement fee: 1% of the loan amount
Early repayment charges: None

Note that this case study is for information and illustration purposes only. It is not an offer, or suggestion of an offer. Each mortgage case is assessed on an individual basis and there is no guarantee that the solution described here can be repeated in the future.

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Your home may be repossessed if you do not keep up repayments on your mortgage

¹ Please note that this deal may not be available to – or suitable for – all customers, dependent upon their individual circumstances. The rate quoted may become out of date at short notice and may not be available at the point at which customers enquire about it. This letter may not contain all the information needed for customers to make a decision and they should seek advice.

² APR calculation based on arrangement fees of £16,000 and legal and valuation fees of £5,000. The actual rate available will depend upon your circumstances. Ask for a personalised illustration. is a trading name of Ltd, 12 Pepper Street, London, E14 9QY which is authorised and regulated by the Financial Services Authority. The Financial Services Authority does not regulate some aspects of buy to let mortgages, overseas mortgages and tax advice. Ltd Registered in England and Wales No: 5070990 Registered Address: Bridge House, London Bridge, London, SE1 9QR. Your initial consultation is obligation free. A fee as described below will be charged on application for a mortgage, this fee is non-refundable. We will also be paid by the lender. On mortgages up to £500,000 the fee would be £495. On mortgages over £500,000 up to £1,000,000 the fee would be £995. For mortgages over £1,000,000 and exclusive or semi exclusive schemes the fee would be up to 1% of the loan amount. e.g. on a mortgage of £2,000,000 the fee would be up to £20,000.

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Largemortgageloans is a trading name of Ltd, Aegon House, Ground Floor Suite, 13 Lanark Square, London