For clients purchasing high-value property, achieving a high loan-to-value (LTV) can be one of the biggest challenges. As borrowing increases, many lenders become more conservative about the level of leverage they are prepared to offer, particularly where the borrower does not want to place assets under management (AUM).
I recently worked with a UK national and British passport holder who was looking to purchase a £6 million residential property in London. Having worked with the client previously, I was already familiar with their wider financial circumstances and understood that securing the right structure would be important.
The client wanted to borrow at 70% LTV without placing AUM with a lender. This created a challenge, particularly given the size of the proposed borrowing. Their income was also generated through several different businesses, each with a different focus. Although the client had a substantial overall income, some lenders would only consider a proportion of income derived from secondary businesses when assessing affordability.
The combination of a large mortgage, high LTV and multiple income sources therefore meant a conventional high-street lender was unlikely to provide the flexibility required.
OUR SOLUTION
I approached a prestigious private bank that was prepared to take a broader view of the client’s overall financial position. The lender was able to consider the client’s various income sources in greater depth rather than applying a standard approach to each individual stream.
After negotiating with the bank, I secured a 70% LTV mortgage against the £6 million property. The facility was structured on an interest-only mortgage basis over a five-year term, providing the client with the repayment structure they were seeking.
The solution demonstrated the value of approaching a private bank mortgage lender when a high-value purchase involves a combination of significant borrowing, a high LTV and complex income.
For clients considering a large mortgage on a high-value London property, specialist lender access can be particularly valuable where standard affordability models do not fully reflect the borrower’s wider financial circumstances.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal, tax or investment advice. Finance is subject to status, underwriting, affordability, property suitability and lender criteria. Terms, rates, LTVs and availability may vary depending on individual circumstances.
Risk Warning:
Your property may be repossessed if you do not keep up repayments on your mortgage or other borrowing secured against it. Property values can fall as well as rise.
Information contained in our case studies is for market and illustrative purposes only. In some cases, these may be made up of multiple cases and are for illustrative purposes only.
Some case studies are made up of enquiries that have come into the business, not all business completes, and the posting of a case study does not represent a completed piece of business.
Property values can fall as well as rise, and you may not get back the amount originally invested. Property investments can be illiquid and may take time to sell. Where borrowing is used, your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
