Private Bank Bridging Loans For High-Net-Worth Client
9th October 2023
Key Details:
- Client: High-Net-Worth Individual
- Loan requirements: Circa £1M
- Property value: £1.4M
- Interest Rate: 6.29% 5-year fixed
A high-net-worth client had to sell their existing home to finance the purchase of their new residence. They were able to negotiate an excellent price on their new home, but the buyer needed them to complete the purchase quickly. However, their current home, valued at £1,400,000, wouldn't have sold in time.
Bridging loans can often be quite expensive. Interest rates are usually over 1% per month of the loan amount, and lender fees can be equal to 2% of the loan amount. However, Enness was able to secure a mortgage against the client's current home and their new home, which allowed the client to purchase the new home without putting any of their own cash into the purchase. Enness was able to avoid using a standard and costly bridging loan because the client's overall wealth was within the appetite of a private bank. As the client was keen to keep a mortgage on the new home after the sale of their current home, they were eager to establish a longer-term relationship with the client.
Enness raised enough funds to cover the stamp duty and deposit. The mortgage was on a base rate tracker, which offered a rate as low as 1.64% plus the Bank of England base rate, with no early repayment charges. Once the property was sold, the mortgage would be repaid. The mortgage against the new home was around £1,000,000, equivalent to 75% loan-to-value. The rate on this mortgage was just 6.29%, fixed for 5-years. The client could enjoy lower monthly payments on a full interest-only basis. At the end of the 25-year term, the client could downsize and repay the mortgage with the sale proceeds.
Enness were able to assist the client in their unique financial situation, providing expert guidance and tailored solutions to help them achieve their goals. If you also require specialist advice on remortgaging your property, please get in touch via [email protected].
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