Landlord refinances sole rental property to consolidate debts and expand portfolio

A newly qualified doctor approached us looking to remortgage his only rental property – a four-bed detached house in West London – which he owns in an SPV limited company.

He wanted to use the capital raised from the refinance to consolidate his debts – a mortgage, a second charge loan and a several credit card balances - whilst also raising enough to put down as a deposit to purchase a second buy to let property.

Guided by his dad, an experienced buy to let landlord, the doctor had requested a five year fixed rate which would allow him to raise £350,000 (twice his current borrowing).

We took the case to an intermediary only lender, which we knew could offer our client a competitive deal with a generous rent to interest calculation.

The following terms were offered and deal went through without a hitch.

Property Details

Property value: £675,000

Loan amount: £350,000

LTV: 52%

Rate: 3.49% fixed for 5 years

Term: 25 years interest only

RTI calculation: 125% @ 3.49%

Borrower: SPV Ltd Co

Lender arrangement fee: 2% (£7,000)

Mortgage payment: £1,037 pcm

Original monthly payment: £919 pcm

Rental income: £2,500 pcm

Gross yield: 4.4 % pa

Consultant: Gavin Richardson, 01732 471613

21st March 2017