Landlord remortgages mixed use property on interest only rate

We were approached by a full-time landlord wishing to remortgage a semi-commercial freehold property consisting of two flats above a takeaway food shop.

The property, located in Birmingham, is being remortgaged by the client in order to raise funds for further property investment.

Our choice of lender was restricted because many commercial funders will not accept mixed use properties with food outlets because they can be difficult to sell quickly.

Also, the landlord wanted an interest only deal, which further reduced the options.

However, because the landlord had 15 years’ experience of renting out mixed use premises, we found a lender that was willing to offer the following terms:

Property value: £200,000

Loan amount: £140,000

Loan to value: 70%

Rate: Lender’s LIBOR + 5.15% (5.90%)

Term: 10 years interest only

Mortgage payment: £688 pcm

Rental income: £1,500 pcm

Gross yield: 9% pa

Lender arrangement fee: 1.5% of loan amount (£2,100)

Consultant mortgage broker: Paul Martins

Consultant tel: 01732 471616

Consultant