Top Slicing Facility Provides Solution for Asset Rich Client
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Our client was looking to rent out their home and raise capital on the property in order to buy a new residential property. The client was looking to secure a mortgage of £2.5 million across both assets.
Our client had a significant portfolio of assets with a net total value over £10 million but was drawing low levels of income from their investment portfolios. The disconnect between the assets and income meant that our client needed a bespoke solution because, despite their assets, their needs could not be met by a standard lender.
We approached a progressive private bank to raise both mortgages, as they were able to offer a ‘top slicing’ facility, meaning they used the total assets as a method to cover the interest payments on the mortgage. They were also able to offer a full interest only facility for both mortgages and produced an offer within three weeks.
The client was both surprised and delighted that we could source a solution at an excellent rate on an interest only basis.
|Loan amount:||£2,500,000 (across 2 properties)|
|Residential purchase rate:||2.39% 2 year fixed rate|
|Buy to let remortgage rate:||2.95% 2 year variable rate|
|Residential purchase APRC:||Overall cost for comparison 3.30% APRC representative variable|
|Buy to let remortgage APRC:||Overall cost for comparison 4.30% APRC representative variable|
|Loan purpose:||Remortgage current residential onto Buy to Let / New residential capital raise purchase
|Lender’s arrangement fee:||0.7% of total loan amount|
|Early repayment charge:||2% of the outstanding loan amount in year 1, and 1% in year 2.|
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 The rate quoted may become out of date at short notice and may not be available at the point at which customers enquire about it.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.
Overall cost for comparison for the purchase is 3.30% APRC representative variable based on 25 payments at a lenders fixed rate, currently 2.39% , followed by 35 payments at the lenders variable house mortgage rate, currently 3.50%.
Overall cost for comparison for the Buy to Let is 4.30% APRC representative variable based on 25 payments at the lenders variable rate, currently 2.19% above the lenders house rate, followed by 35 payments at the lenders house variable rate, currently 4.75%. Because all, or part of, the mortgage is currently, or will revert to, a variable interest rate mortgage, the actual APRC could be different from this APRC and the payments could increase if the interest rate of the loan changes. For example, if the interest rate rose to 11.50%, the APRC could increase to 12.50%. The actual rate available will depend on your circumstances. Ask for a personalised illustration.
Your home or property may be repossessed if you do not keep up the repayments on your mortgage. Changes in the exchange rate may increase the sterling equivalent of your debt.