I successfully arranged a mortgage for an old age pensioner. My client was 85 years old and considering the lenders tend to shy when you are over the age of 55, this finance for an old age pensioner was quite a feat if I do say so myself!
My client and his wife had a banking relationship in Switzerland and a Swiss mortgage for €1 million on their residential £8 million property in West London. Their current mortgage was on a high interest rate, however their main motivation for bringing the mortgage onshore was to reduce the inheritance tax liability and with the appropriate independent financial advice, enable them to reduce any future tax issues their children will have to meet when they pass away.
As they were both 85 years old they did not have an income per se, except from their Swiss investments worth £8 million. The aim was to remortgage their West London property and bring debt onshore to the United Kingdom.
I spoke with many of the private lenders in and outside the United Kingdom that we work closely with and came up with a positive finance for an old age pensioner outcome.
I remortgaged the Swiss mortgage of €1 million and increased the total debt to release cash, enabling the clients to pay upfront the 5 years interest and therefore avoid having to sell their investments to pay the interest. This made the bank happy with the outcome as they could keep the interest as collateral to protect themselves against the loan. I also communicated a solid exit strategy with them which meant that they could downsize the property.
Fully explaining the structure and risk profile of the couple’s £8 million investments further made the bank comfortable with the loan.
The clients were delighted with the solution and the finance for old age pensioner loan was fixed at an interest rate of 3.49% over 5 years.
This provided the solution of refinancing their expensive Swiss mortgage, brought the debt onshore to the United Kingdom and they were both happy this would leave the best inheritance legacy to their children.