After the financial crash of 2007, almost all interest-only mortgages were withdrawn from the market as they were deemed too high risk for the banks. But banks have redefined their lending criteria and they are available to those who have the wealth to support them. Indeed, we have helped secure them for our clients many, many times.
However, the affordability criteria tend to be stricter and loan to values (LTV) will be capped, so it’s important to speak to a broker who understands the nuances and can present your case in the most favourable light.
Wealthy clients are excellent candidates for large interest-only mortgages, as they have the wealth in the background to provide a lender with the security required for these types of loans.
Many Enness Private Office clients are keen to take out interest-only mortgage products because they prefer to maintain their liquidity on a day-to-day basis; we work with many strategic investors and successful self-employed businesspeople, who are often keen to keep cash flow high to support their business endeavours.
WHAT ARE THE BENEFITS OF A LARGE INTEREST-ONLY MORTGAGE?
An interest-only loan can provide you with flexibility, keeping your monthly payments lower. This is ideal for self-employed clients, for example, who may pay themselves a monthly salary or pay themselves in dividends.
Another key benefit can be found in cost savings and interest-only mortgages are a good option for clients who have a complex and irregular income made up of variable bonuses and commissions. It can work to keep your monthly obligations low and to make bigger lump sum payments to reduce your capital when you have more money. Clients can customise their repayment schedule to suit their situation, so when they make additional payments against capital owed, this will result in lower required payments in following months as the capital they are paying interest on has decreased.
HOW CAN ENNESS PRIVATE OFFICE HELP WITH LARGE INTEREST-ONLY MORTGAGES?
If you have a sensible exit strategy in place, an interest-only mortgage can be a hugely beneficial product. Your ability to take out an interest-only mortgage will be calculated on your individual circumstances, so a thorough consultation will be necessary.
We have access to over 250 lenders and have plenty of experience in securing large interest-only loans for our clients, and would be delighted to consider if we can do the same for you.