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Cross Currency Cash Backed Lombard Loan For Ultra-High-Net-Worth Individual

16th April 2024
Mortgage Broker

Zain Zaidi

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US Property
Zain Zaidi
Mortgage Broker

Zain Zaidi

  • Client: UK National / Resident 
  • Cash Value: Approximately £4m 
  • Loan Amount: Circa Non-GBP 1m

In this case, Enness was approached by a UK National looking to purchase a holiday home in the USA via a traditional mortgage on a term loan and wanted to borrow in a foreign currency. The client had accumulated a large wealth and considerable liquid assets, including cash.

The case was unique because the client had a large international asset pool to choose from. The challenge was finding a lender comfortable with the multi-currency element and the funds being used to purchase an overseas asset.

Rather than provide a traditional mortgage in the USA, Enness was able to arrange a bespoke lending against the client’s cash holdings. The lender was comfortable with the client borrowing in a foreign currency and also applied a savings rate to the cash they held on deposit with them. This created an ‘Arbitrage Rate’, i.e., the difference between the cost of borrowing the funds vs how much interest they were gaining on it, allowing them to borrow at a favourable rate. This was an indefinite revolving facility, meaning there was no set end date to the term of the loan and the client could drawdown and payback the loan as and when they pleased.

Enness has access to over 500 Lenders and is able to create bespoke facilities for all high-net-worth clients, looking at their complete asset base and providing a holistic based approach in providing advice. The client had anticipated arranging a foreign currency mortgage for over 5% per annum but ended up with a flexible option for 0.5% per annum instead.

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