We were approached by a full-time landlord with a substantial portfolio of rental properties all owned personally.
The client enjoys adding value to his properties by renovating and extending and although he rents out the majority he sells some to maintain cash flow.
Always keen to save money, the landlord was looking to remortgage a two-bed apartment in an upmarket Surrey town because the existing two-year rate was about to expire and would push his monthly payments up to £855.
In particular, he was interested in taking advantage of a competitively priced five year fixed rate product.
The number of lenders we could approach was slightly restricted as some do not accept borrowers whose sole income is from rent; however, we approached a lender with which we have semi-exclusive access which offered a rate that allowed the client to save £215 per month.
The client preferred to remortgage in his personal name rather than use a limited company and accepted the following deal:
Property value: £330,000
Loan amount: £187,500
Rate: 4.09% 5 year fixed
Term: 25 years interest only
Lender arrangement fee: 1.5% (£2,813)
Mortgage payment: £640 pcm
Original monthly payment: £855 pcm
Rental income: £1,095 pcm
Gross yield: 4% pa
Consultant: Chris Longhurst, 01732 471607