- Property type: Victorian detached house, Clapham
- Property value: £3.7M
- Loan amount: £2.5M
- LTV: 67.6%
- Rate: 2.24% fixed for 2 years
- Mortgage term: 10 years
We were recently approached by a client looking to purchase a larger family home. The property in question was a Victorian detached house in Clapham valued at approximately £3.7M. The client wanted to borrow as much as possible while still securing competitive mortgage terms.
The client worked in private equity, meaning their income structure was more complex than a conventional salaried borrower. A significant part of their overall remuneration came from carried interest, which can be treated differently by lenders depending on its nature, history and supporting evidence.
This meant that identifying the right lender was particularly important. While some lenders may place limitations on the income they will consider from private equity remuneration, others take a more flexible approach when assessing the wider financial position of a high-net-worth borrower.
Enness reviewed the client’s circumstances and approached a lender experienced in working with private equity professionals. The lender was able to take the client’s carried interest into consideration when assessing affordability, helping to support the level of borrowing required.
As a result, Enness secured a mortgage of £2.5M against the £3.7M Clapham property, representing a 67.6% LTV. The mortgage was arranged over a 10-year term with a fixed rate of 2.24% for the first two years.
The solution enabled the client to purchase the larger family home while achieving the level of borrowing required. It also demonstrated the importance of approaching lenders with an understanding of more complex income structures rather than relying solely on standard affordability criteria.
For high-net-worth borrowers, income can come from a combination of salary, bonuses, carried interest, investment income and other sources. The extent to which these can be included in affordability calculations varies between lenders and will depend on the individual circumstances and supporting documentation.
Enness specialises in complex and high-value mortgage cases, working with a broad range of lenders to identify suitable solutions for borrowers with more unusual income structures. Every application is assessed individually, with the final terms subject to lender criteria, underwriting and affordability.
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, valuation, due diligence and lender criteria. Terms, rates, LTVs, fees and availability may vary depending on individual circumstances. The rate and terms stated relate to the historical case and are not indicative of current or future pricing.
Risk Warning:
Your property may be repossessed if you do not keep up repayments on your mortgage. Borrowers with variable or performance-related income should consider the potential impact of changes in income on their ability to service mortgage commitments. Property values can fall as well as rise, and borrowers should ensure they have a suitable strategy for meeting their mortgage obligations.
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.
