The client is an experienced London landlord who was looking to raise funds in order to refurbish one of his rental properties.
He preferred not to remortgage any of his properties because all of his existing mortgage rates are very competitive. So we discussed a variety of equity release products which do not affect the first charge holder.
After exploring several options, the client chose an equity release product with no monthly payments; instead, the lender charges annual interest which is rolled up into the loan and settled at the end of the term.
His preference was to raise equity against his home - a five bed house valued at £1.6m with an existing mortgage of 50% LTV. Here are the details of the deal:
Property value: £1,600,000
Loan amount: £160,000
Rate: 7.39% per annum
Term: 3 years capital & interest
Mortgage payment: None.
Repayment amount at end of 3 year term: £200,823
Lender arrangement fee: 2% of loan amount (£3,200), deducted from loan
Completion date: June 2015
Consultant: Nick Helm
Tel: 01732 471 608