- Client: International property owner
- Property Value: Slightly above €6 million
- Existing Debt: Just under €1 million
- Additional Facility: Up to €2 million
- Structure: Seven-year interest-only loan
Enness was approached by a client looking to refinance an existing loan secured against a property in Portugal. The property was valued at slightly more than €6 million, while the outstanding borrowing was just under €1 million.
The main challenge was the client’s financial profile. A significant element of their wealth was held within their business, including retained income, and the client needed a lender that was comfortable taking this wider financial position into account when assessing the refinance.
Enness reviewed the circumstances and identified a lender able to refinance the existing facility through a seven-year interest-only mortgage. The substantial equity in the property also created an opportunity to structure additional liquidity into the facility.
The lender made up to €2 million of additional borrowing available to the client, with interest only becoming payable on the additional funds when they were actually drawn. This gave the client access to liquidity without having to pay borrowing costs on funds that remained unused.
The structure allowed the client to refinance their existing loan and cover the associated transaction costs while retaining the flexibility to access further capital over the seven-year term. If additional funds were required for a future investment or another liquidity need, the client could draw from the available facility rather than arranging an entirely new loan.
For a client with substantial equity and a financial position that did not fit neatly into conventional lending criteria, this flexibility was particularly valuable. The facility provided a way to combine the immediate refinancing requirement with a longer-term liquidity strategy.
The case demonstrates how an interest-only structure with additional undrawn availability can provide flexibility for borrowers who expect their capital requirements to change over time. For international property owners with complex income or wealth structures, the right lender can take a broader view of the overall financial position and structure the borrowing accordingly.
If you are looking to refinance a property in Portugal and have retained income, business interests or other complex financial circumstances, speak to a mortgage specialist to discuss your requirements.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal or tax advice. Finance is subject to status, affordability, underwriting, property assessment and lender criteria. Terms and availability will vary depending on individual circumstances and the proposed transaction.
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.
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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.
