Interest only is not dead

85% LTV interest only large loan placed by largemortgageloans.com. To discuss this or any other large mortgage case, please contact us.

The proposition

A broker’s clients, Mr & Mrs H, were first time buyers and had just had an offer for £2,050,000 accepted on the property that they were currently renting. They were looking to borrow £1,742,500 (85% LTV) on interest only.

Case profile

The broker could not find any lender that would offer such a large loan size on an interest only basis, and also at such a high loan-to-value. Mr H was a senior banker with a £300,000 basic salary and a bonus of over £1,000,000 and Mrs H was a senior manager in retail, earning over £100,000 so income was not a problem. The clients wanted to be able to make unlimited overpayments as they both receive bonuses and want to be able to pay down the loan over the next 4 or 5 years.

The solution

The broker was happy for largemortgageloans.com to contact the client direct and we arranged to meet Mr H in his office to collect his paperwork and carry out a full fact find about his circumstances and priorities. We recognised that for such strong applicants there should be a private bank willing to offer these applicants a mortgage loan at a high LTV, if the clients were committed to reducing the LTV – using their bonuses – within the space of a year or two.

Deal highlights

We placed the case with a private bank which offered the clients a mortgage of 85% based on an interest rate of 2.75% over Bank Rate, with a 0.60% arrangement fee. The bank was happy to do this on the basis that the clients committed to reducing the LTV to 75% within 3 months. As a condition of the mortgage the bank also wanted the clients to commit to staying with the bank for a minimum of 1 year, but would allow unlimited overpayments provided that the mortgage was not redeemed in full for 1 year after completion.

To make matters more difficult the property was then down-valued by the surveyor by £50,000 leaving the client short of funds and their vendor would not move on the purchase price. The bank agreed to split the shortfall with the clients and lend them £1,717,500 (85.875% LTV) against the property, now valued at £2,000,000. This got the clients out of a sticky situation and they were delighted to be able to buy their dream property.

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.

Notes

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

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.

Please note that this specific deal may not be available to – or suitable for – all customers, dependent on 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 document may not contain all the information needed for customers to make a decision and they should seek advice.

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Your home or property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it. Changes in the exchange rate may increase the sterling equivalent of your debt. You may have to pay an early repayment charge to your existing lender if you remortgage. Think carefully before securing any other debts against your home.  

largemortgageloans.com is a trading name of Largemortgageloans.com Ltd, Aegon House, Ground Floor Suite, 13 Lanark Square, London, E14 9QD authorised and regulated by the Financial Conduct Authority (FCA). Our FCA registration number is 302228 and can be viewed by visiting the FCA website: www.fca.org.uk.  The FCA does not regulate tax advice or some aspects of commercial, buy to let, overseas mortgages, bridging finance, finance and asset lending.  

Largemortgageloans.com Limited is registered with the Guernsey Financial Services Commission, reference number: 2269418, as a Non-Regulated Financial Services Business.  

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