The case I most recently worked on was a low interest rate multi million pound mortgage for a family who owned a large property in Chelsea valued at £8 million. They had a relatively small mortgage on it – £750,000 outstanding and wanted to borrow a further £400,000 from the property.
We recommend our clients to regularly review their mortgage options leading up to the end of their term as this often makes financial sense. The mortgage market is highly dynamic and chances are new lenders and new product have appeared since your last mortgage was set.
The amount they wanted to borrow was also required to tide them over for the next 2 years, after which they planned to sell the house. They had school fees to pay and a holiday home abroad which they wanted to renovate. For this reason they needed a low interest rate multi million pound mortgage.
The problem was that in comparison to their income, which was jointly £80,000, the large amount they wanted to borrow was quite substantial. Consequently, before coming to me they tried various banks and brokers but to no avail.
Most high street lenders look at affordability when determining whether a client’s mortgage application could be approved, which in this case excluded the family. Private banks on the other hand are much more flexible in considering whole financial situations and compiling tailored products to meet their needs.
I was able to successfully find them the solution that they wanted. I approached a private bank who said they could provide a rate of 3.25% above Libor for the next 2 years whilst they looked into selling their house. In order for the Private Bank to achieve this lending they needed the clients to invest a certain amount of cash with the bank. As my client’s only assets were property they were able to capital raise up to a total £2.5m and place the remaining £1.25m as assets under management with the bank. The clients were pleased with the deal as they now had 2 years to sell the property, the funds to improve both of their properties and a new investment portfolio with the lender.