- Clients: International property investors
- Property: Two Swiss chalets
- Value: Approximately CHF 3 million per chalet
- Finance: Interest-only mortgage
- Term: Five years
Enness was approached by clients looking to acquire two chalets in a prestigious Swiss skiing destination, each valued at approximately CHF 3 million. The properties were intended to form part of a longer-term investment strategy, with the clients planning to make them available for rental throughout the year.
The location offered potential demand beyond the traditional winter ski season, with the properties also expected to appeal to visitors during the spring and summer months. A specialist management company would oversee the rentals, allowing the clients to hold the properties as investments while managing the day-to-day requirements of the lettings.
The clients wanted to finance the acquisitions rather than commit all of their available capital to the purchases. An interest-only structure was particularly attractive because it allowed them to manage their monthly borrowing costs while retaining capital for other investments and expenses.
Enness identified a banking partner able to provide the required net loan amount on a five-year interest-only basis. The clients were also given the flexibility to choose between a fixed or variable interest rate, allowing the structure to reflect their preference around certainty and future rate movements.
The facility also provided scope for the clients to renew the borrowing twice over the following 10 to 15 years, subject to the lender’s criteria at the relevant time. This gave the investment a longer-term financing strategy rather than requiring the clients to determine their entire exit plan at the outset.
The combination of an interest-only structure and flexible rate options allowed the clients to retain greater control over their wider capital position while building a portfolio of high-value Swiss investment properties.
For investors considering international property finance, the structure of the borrowing can be just as important as the amount available. Interest-only lending, fixed or variable rates and the ability to refinance in the future can all play a role in determining whether a facility fits the wider investment strategy.
If you are considering financing a property purchase in Switzerland or elsewhere in Europe, explore Enness’ European mortgage solutions or speak to a mortgage specialist about 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. Interest-only borrowing requires a suitable repayment strategy, and property values can fall as well as rise.
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.
