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Case Profile
Our clients’ mortgage on their second home in London was about to expire. Aged 74 and 77, their existing lender did not have a provision for later life lending, and therefore wasn’t willing to renew the loan.
The mortgage was based on income from pension drawdown and – to add more complexity – the majority of the clients’ pensions were based in the US. Therefore the loan was classed as a foreign currency mortgage.
Solution
Our team of advisers used their expert knowledge and global network of finance providers to source lenders who specialise in later life loans. We approached a specialist lender which does not have a hard age restriction and can accommodate foreign currency loans. The clients could evidence affordability on the loan for at least five years, based on the amount of money in both their UK and US pensions. The specialist lender offered the clients a discounted variable rate mortgage for a term of five years.
The clients were delighted that they were able to keep the property, and now have the security to enjoy their second home for at least the next five years.
Deal Highlights
Loan amount: £690,000
Rate: 3.5% discount for 5 years
APRC: Overall cost for comparison 3.80% APRC representative variable
LTV: 55.7%
Term: 5 years
Type: Interest Only
Loan purpose: Remortgage
Lender’s arrangement fee: 1% of loan amount
Early repayment charge: 3% of the loan balance outstanding for the first 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 The rate quoted may become out of date at short notice and may not be available at the point at which customers enquire about it.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 3.8% APRC representative variable based on 60 payments at a lenders variable rate, currently 5.49% with a discount of 1.99% for 5 years, giving a current rate payable of 3.5%. 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 7.5%, the APRC could increase to 11.6%. 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.
