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:
- They had reached the end of their initial mortgage term and been reverted onto the lender's standard variable rate
- They wanted to take advantage of the well-priced longer term fixed rates currently available on the market
- 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
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
14th June 2017