Large Value Mortgage for Jersey Property

• Client: Professional couple based in Jersey
• Property: Residential property in Jersey
• Property value: £2M
• Loan amount: £1.075M
• LTV: Approximately 54%
• Mortgage type: Interest-only
• Term: Five years
• Margin: 2.50%
• Purpose: Equity release and debt consolidation

Equity release can provide property owners with access to capital that has accumulated within their home, subject to lender criteria and affordability. Enness was approached by a professional couple based in Jersey who were looking to refinance their existing mortgage and release equity from their property to consolidate a number of outstanding debts and other significant expenses.

The couple had an existing high street mortgage alongside private debt and other financial commitments. They had also carried out improvements to their property over time, creating additional equity. The objective was to restructure their borrowing and use the available equity to consolidate their existing debts into a single mortgage facility.

The property was valued at approximately £2M, with the required mortgage of £1.075M representing an LTV of approximately 54%. While the relatively modest LTV provided substantial equity in the property, the couple’s income multiple did not fit within the criteria of the high street lenders they had initially considered.

This meant that a conventional mortgage solution was unlikely to meet their requirements. Rather than focusing solely on the income multiples applied by mainstream lenders, Enness explored the private banking market for a lender able to take a more holistic view of the couple’s financial circumstances.

Following discussions with suitable lenders, Enness identified a private bank willing to consider lending at eight times the couple’s combined gross income. The lender was also comfortable with the couple’s established track record of servicing their existing debts and meeting their lifestyle expenses.

The resulting facility was structured as a five-year interest-only mortgage with a margin of 2.50%. The new borrowing allowed the couple to consolidate their existing debts and release equity from the property while restructuring their overall monthly commitments.

According to the case details, the payments associated with the consolidated debt were lower per calendar month than the couple had historically been paying across their various credit providers. However, consolidating debt against a property can increase the period over which borrowing is repaid and may increase the total amount of interest payable, particularly where an interest-only structure is used.

The case demonstrates how private banks can consider circumstances that may fall outside the standard income multiples used by high street lenders. For borrowers with substantial property equity and a proven history of managing their financial commitments, a more bespoke approach may provide an alternative route to refinancing.

Enness works with local and international lenders across the specialist mortgage market, including lenders able to consider complex income and borrowing requirements in Jersey and other jurisdictions. The appropriate financing structure will depend on the borrower’s circumstances, property value, income, existing liabilities and individual lender criteria.

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. Rates, terms, LTVs, fees and availability may vary depending on individual circumstances. The margin stated relates to the historical case and is not indicative of current or future pricing.

Risk Warning:
Property securing finance may be repossessed if repayments are not maintained. Debt consolidation secured against property may increase the overall period of borrowing and the total interest payable. Interest-only mortgages require the outstanding capital to be repaid at the end of the agreed term or when otherwise due. Borrowers should ensure that a suitable repayment strategy is in place and fully understand the costs and risks before proceeding.