I recently secured a million pound buy to let remortgage for a client of mine whose product had expired.
My client in this instance worked for a well-known technology firm. He owned two buy to let properties in south-west London, and lived in a third property with his wife and children, which was rented. One of the buy to lets had initially been his main residence, but in order to make sure they were in the right catchment area for his daughter’s school they had decided to rent instead.
In the summer of 2015, I had secured a straightforward buy to let mortgage for him. He was now looking to refinance the second buy to let, worth £1.6m, and approached me again. He needed a mortgage of £1m.
His previous product was about to expire, meaning the interest rate he was paying was going to revert to the lender’s Standard Variable Rate (SVR) – an increase from 2% to 4%, effectively doubling his mortgage payments overnight. He needed to take swift action, but was in a difficult position as his current lender was not prepared to renew his product as he didn’t meet their affordability criteria on rental income.
There were a few complications as I started looking for a new lender prepared to take on the case. Firstly, my client was not an owner-occupier; he was living in rented accommodation. With buy to let mortgages, lenders generally prefer the borrower to be living in their own property. Secondly, his rental income was relatively low. Thirdly, a £1m buy to let mortgage was too big for the high street lenders to be interested.
My client’s personal income, however, was very strong. I therefore approached a private bank, who were prepared to take a more holistic view of his situation. They were happy to take both his personal and rental income into account, and were not concerned about his non-owner-occupier status.
I was able to secure him a fixed rate product at 2.99%, with which he was delighted.