I was approached by an investment banker looking to refinance his main residence. He had an existing loan of £1.4 million on a Kensington property valued at £2.5 million and was looking to increase his mortgage to £1.5 million to repay some unsecured borrowing. As it happens, there is a remortgage market in the UK for the first time in a number of years .
His existing lender had offered him terms at around 4 per cent but the client felt he could do better elsewhere, so he approached me for advice.
As the client was an investment banker, he managed many of his own assets. So, he was reluctant to hand over control of his assets under management to a private bank in order to secure cheaper lending terms.
employer. So, I suggested that he may consider moving this to a new lender in order to benefit from a lower rate on his £1.5 million mortgage.
As a significant proportion of the client’s cash and bonuses did not come straight into the UK and he had significant offshore investments, I approached an offshore lender based in Jersey. I was able to agree the £1.5 million loan at a rate of 1.9 per cent over three month LIBOR. This was on a five year interest only basis with no requirement for bullet repayments and interest due on a quarterly basis.
As the lender was offshore the client will be able to easily repay capital from overseas income and accounts.
During this process the client also approached a private bank directly who were prepared to agree the lending at a rate of around 2.75 per cent. However, with my contacts and the suggestion that he client moved his £500,000 pension fund to the new lender, I was able to agree terms that were around 35 basis points cheaper than the rival lender.