Helping a client expand into the ‘mixed-use’ property market

The client had carefully built wealth and equity over time through a series of successful property purchases and investment portfolios. However, he required additional capital to complete the acquisition.

He owned an unencumbered buy-to-let property and wanted to release equity from it to contribute towards the purchase, alongside a mortgage secured against the Jersey property.

Once all considerations had been reviewed, and with all the commercial units leased and the residential properties tenanted, we concluded that this was a case we could pursue. Based on the profile of the mixed-use property, we structured the lending to provide up to 60% loan-to-value (LTV) secured against the new property, alongside 60% equity release from the buy-to-let.

Having reviewed the client’s overall income and expenditure, we were able to structure the mortgage so that 25% of the mortgage for the commercial element was placed on our commercial rates on a repayment basis, while the remaining 75% was placed on interest-only terms using our buy-to-let rates. This approach meant that, by the end of the term, the client would have increased equity while maintaining a manageable interest-only balance and keeping servicing costs to a minimum. The unencumbered property was financed on our standard buy-to-let rates at 60% LTV.