Complex mortgage for £7million property

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THE SCENARIO

I recently assisted a client with an incredibly complex mortgage case, and was pleased to find a successful resolution. My client was a British national of Greek origin, who had recently taken on a larger Director’s role in his family’s billion-pound business empire.

My client had found his dream property, which was set to be a ‘home for life’. Unfortunately, in his new capacity as company Director, he didn’t pay himself a large salary, preferring to keep the liquidity within the business. As such, his salary on paper couldn’t support a large mortgage, although my client certainly could afford to service the loan in the long term. He was set to receive a large bonus next year, but this wouldn’t be paid in time to allow him to purchase the property.

He therefore approached Enness to see if we could find a solution. Considering his wider profile, I felt confident I could assist. His current home was worth £1.9million, whilst the property he wanted to buy was valued at £7million. Highlighting the strength of his overall portfolio, I approached an investment bank with whom Enness has a very close working relationship.

OUR SOLUTION

We agreed to remortgage his existing property and secure the debt against both this and the new home, creating a total loan to value (LTV) of over 90%. Being able to negotiate for this level of borrowing is very unusual, but would enable him to go ahead with the purchase, despite the fact his salary meant he could not afford to meet lenders’ affordability criteria.

This would be a blended product, in which part was on a 5-year fixed rate of 2.79%, and part was on a variable rate of 3.85% + Base Rate. The client was required to pay down the loan within the first 12 months using his bonus, to bring the loan nearer the 70% LTV mark. The latter part would enable my client to make significant repayments without facing early repayment charges.

This was an excellent outcome for a complex mortgage case, and a prime example of what I specialise in at Enness Private Office—finding bespoke solutions for ultra-high net worth individuals with complex requirements.

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