£400k refinance for large portfolio landlords

£400k refinance for large portfolio landlords

14.06.17 | Written by: Chris Longhurst

A married couple – both professional landlords approached us looking to refinance one of their rental properties. Between them, the couple own circa 40 rental properties, with a total mortgage borrowing of over £9m.

The property in question is a 3-bed terraced house in West London. Since purchasing the property in 2011 for £185,000 the couple had carried out major redevelopment works on it including a basement and loft conversion. It was now estimated to be worth in the region of £600k.

The couple were looking to refinance for 3 reasons:

  1. They had reached the end of their initial mortgage term and been reverted onto the lender's standard variable rate
  2. They wanted to take advantage of the well-priced longer term fixed rates currently available on the market
  3. They were looking to raise capital for further property investment

With such a large portfolio, the clients had reached the exposure limits set by many lenders, which restricted the finance options available. Thankfully a new lender had recently entered the market, which doesn't impose a limit on borrowing with other lenders.

Happy that the couple were a good risk, the following terms were offered:

Property value: £600,000

Loan amount: £429,600

LTV: 72%

Rate: 3.99% five-year fixed

Term: 25 years interest only

RTI calculation: 140% @ 3.99%

Mortgage payment: £1,429 pcm

Previous interest rate: 4.98% (variable)

Previous loan amount: £294,029

Previous monthly payment: £1,220

Lender arrangement fee: 1.5% (£6,444)

Rental income: £2,000 pcm

Gross yield: 4% pa

Borrower: Joint personal application

Consultant: Chris Longhurst, 01732471607

ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.