Securing a flexible mortgage for a buy-to-let investment
Our clients’ wishes
We were approached by a broker whose client, Mr D, was wanting to purchase a buy-to-let (BTL) investment property in the UK. Mr D is a British national who was living and working permanently in the UK and needed a £500,000 mortgage for a 2-bedroom lower ground floor flat in Fulham, West London. The property was priced at £720,000, and he was looking for a Capital and Interest repayment mortgage (C&I) over 24 years.
Mr D wanted flexibility with the loan, allowing him to make extra payments when possible. He also wanted to take advantage of a low-interest rate.
Our clients’ situation
The expected rental income of the property was £36,000 per year, which wasn’t enough to cover the mortgage payments. The property was also a lower ground floor apartment, which typically have ventilation issues, and as such many lenders will not lend against.
However, we worked closely with Mr D and the broker early on, ensuring the property was in good condition. It had recently been renovated, with no ventilation concerns. Since Mr D also had high earnings, supported by bonuses and long-term incentive plans, we were able to use part of his income to cover the shortfall in rental income.
By taking the time understand Mr D’s financial situation and property, we were able to offer a tailored solution: a 2-year variable rate mortgage at 0.95% above the Bank of England (BOE) base rate, over a 24-year term on a repayment basis.
Our client's outcome
By taking the time understand Mr D’s financial situation and property, we were able to offer a tailored solution: a 2-year variable rate mortgage at 0.95% above the Bank of England (BOE) base rate, over a 24-year term on a repayment basis. This allowed Mr D to benefit from a low-interest rate and the flexibility to make extra payments toward the mortgage when he could.
Both the client and the broker were delighted with the outcome, and the mortgage is on track to complete soon.
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Any examples of investments and structures used are for illustrative purposes only. This case study does not constitute an invitation or inducement to buy any financial investment or service. None of the content constitutes advice or a personal recommendation. Individuals should seek professional advice, based on their jurisdiction and personal circumstances, before making any financial decision.
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