- Client: International property investor
- Additional Finance Required: £500k
- Existing Property: Balearic Islands property valued at €1 million+
- Maximum LTV: 60%
- Term: 25 years, fully amortised
- Rate: Fixed or variable
Enness was approached by a client who was in the process of purchasing a property in the UK. Their existing bank was prepared to finance 70% of the property’s value, but the client required an additional £500k to complete the acquisition.
Although the client could complete the purchase using cash, they wanted to structure the transaction as cost-effectively as possible. This meant that more expensive short-term solutions such as bridging finance or a second charge were not appropriate for their requirements.
During our assessment of the client’s wider property portfolio, we identified an opportunity to use an existing property in the Balearic Islands as security. The property was valued at more than €1 million and provided an opportunity to release equity without requiring the client to sell the asset.
Enness identified a lender able to consider the Balearic property as security and structured a long-term facility with a maximum LTV of 60%. The proposed loan was fully amortised over a 25-year term, providing the client with a longer-term financing solution rather than the higher costs typically associated with short-term borrowing.
The structure also gave the client flexibility over the interest rate, with the option to choose between a fixed or variable rate depending on their preference and wider financial objectives.
By releasing equity from the Balearic property, the client could raise the additional £500k required to complete their UK acquisition without having to sell the property or rely on a more expensive bridging or second-charge facility. This allowed them to preserve their existing assets while completing the purchase on a more cost-effective basis.
The case demonstrates the value of considering a client’s wider international property portfolio when arranging finance. Rather than focusing solely on the property being acquired, Enness was able to identify available equity elsewhere and use it to create a financing solution better aligned with the client’s objectives.
For clients with international property assets who are looking to release equity or raise capital for a new acquisition, international mortgage solutions can provide an alternative to more expensive short-term borrowing. Speak to a mortgage specialist to discuss your circumstances.
Risk Warning:
Borrowing against property carries risks. Failure to meet the terms of a mortgage or other secured facility could result in enforcement action against the property used as security. Interest rates, property values and lending criteria can change, and borrowers should consider the total cost of borrowing and ensure the proposed repayment strategy is sustainable.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal or tax advice. Finance is subject to status, 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.
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.
