The Council of Mortgage Lenders (CML) this week announced a 46% increase in remortgaging volume by home owners, compared to December 2016. This is certainly something we are seeing at Enness and there are a number of reasons for this.
Interest rates are currently at their lowest so home owners are choosing to remortgage onto a better rate, making the most of the current market. Furthermore, the current cost of moving, including stamp duty and increasing house prices, are encouraging people to stay put, improving their properties, rather than moving on, releasing equity for home improvements.
However, remortgaging can be challenging if your income is complex – for example, clients who run a limited company may decide to leave profits within the company, taking a minimal salary and dividends. To a lender, it may look like their income is too small to afford the mortgage when, in fact, they are more than capable of covering the repayments. We work with lenders who are willing to take a more holistic view of a client’s wealth, lending on the net profit of a business, maximising borrowing for the client. One particular private bank is competing with high street rates, lending more to clients whose wealth is held within a limited company.
The private bank is offering a fixed rate self-employed product for borrowers a rate of 1.99% fixed over two years, at a maximum loan to value (LTV) of 75% for loans up to £2.5million.
- Rate of 1.99%
- 2-year fixed rate
- Up to 75% LTV for loans up to £2.5million
- Up to 70% LTV for loans up to £5million
This product is also extremely valuable for self-employed clients who are based overseas; I recently brokered the mortgage for a client who works between Dubai and England but who was paid in sterling. It wasn’t possible to place the mortgage on the high street so this private bank was ideal for his circumstances.