Do you need private finance to purchase your dream home? We have the private banking contacts to provide a tailored solution for you. To discuss this or any other large mortgage case, please contact us.
Case profile
The client is a retired entrepreneur and wanted to purchase a flat in central London in which to spend his retirement. He had recently sold his business and invested the proceeds into an investment portfolio that he did not want encash.
The client was not looking to move into the property for another 3 to 5 years when his youngest child would leave home. He wanted to purchase the property now as he predicted that property prices in central London would rise significantly in that time whilst the price of his current main residence would not increase by the same proportion.
Solution
We introduced the client to a private bank who could lend 100% of the purchase price by taking a charge over the new let property as well as the client’s own home. They rely on the rental income from the let property to service the loan as the client is now retired. Part of the arrangement was that the client invests a part of his portfolio on their platform. Although many of the private banks wanted £1,500,000 invested (i.e. 50% of the loan amount) we were able to negotiate this to a much lower amount to enable the client to get to know the bank better before he invests more of his savings with them. We were able to complete the client’s purchase in time without him having to cash in any of his investments.
Deal highlights
| Loan amount: | £3 million (60% LTV of new flat valued at £3M and current property valued at £2M) |
| Rate: | 2.25% over 1 month LIBOR, current pay rate 2.83% |
| Term: | 5 years |
| Type: | Interest Only |
| APR: | Overall cost for comparison 5.9% APR representative variable |
| Lender’s arrangement fee: | 1% of overall loan amount |
| Early repayment charges: | 1% of loan amount for 2 years |
Notes
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 The rate quoted may become out of date at short notice and may not be available at the point at which customers enquire about it.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 5.9% APR representative variable based on a LIBOR rate of 2.83% with lender’s arrangement fees of 1% x £3 million (£30,000) and legal and valuation fees of £10,000. The actual rate available will depend on your circumstances. Ask for a personalised illustration.
