Mortgage for UHNW French National

• Client: UHNW French national and resident
• Property: London apartment valued at £18M
• LTV: 100%
• Assets under management: £6.3M
• Mortgage type: Interest-only
• Term: Five-year facility
• Interest rate: 1.09% above Bank of England Base Rate

Arranging mortgage finance for an ultra-high-net-worth borrower can involve very different considerations from a conventional residential mortgage. Where the property value is substantial and the borrower has significant assets, private banks may be able to structure bespoke facilities around the wider financial position.

Enness was approached by a French national and resident looking to acquire a London apartment valued at approximately £18M. The client had a background in property and was looking for a sophisticated private banking solution to fund the acquisition.

The property was located at 20 Grosvenor Square in Mayfair, part of a high-end residential development offering a range of concierge, security and hospitality services alongside private residential amenities.

The client was looking for 100% mortgage financing rather than contributing a cash deposit towards the acquisition. This represented the principal challenge of the transaction, as a 100% LTV facility on a property of this value requires a lender prepared to consider the borrower’s wider wealth and financial position alongside the underlying property.

The client also wanted to retain a significant proportion of their assets while establishing a relationship with a private bank. This provided an opportunity to structure the transaction around assets under management rather than requiring a traditional cash contribution to the property purchase.

Enness approached its private banking network and identified a lender prepared to consider the proposed structure. Following negotiations, the private bank agreed to provide 100% LTV mortgage finance while taking £6.3M of the client’s assets under management.

The resulting facility was structured on an interest-only basis over five years. The mortgage was arranged at a rate of 1.09% above the Bank of England Base Rate at the time, providing the client with a bespoke financing structure for the £18M acquisition.

The transaction demonstrates how private bank mortgages can provide alternative structures for UHNW borrowers with substantial assets. In certain circumstances, assets under management can form part of the overall lending relationship and may allow a private bank to consider a higher LTV than would typically be available through conventional mortgage lending.

Enness works with private banks and specialist lenders on substantial UK property transactions, including high-net-worth mortgages. Each application is considered according to the borrower’s individual circumstances, property, assets, liquidity and the relevant lender’s 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, property suitability, due diligence and lender criteria. Terms, rates, LTVs, fees and availability may vary depending on individual circumstances.

Risk Warning:
Property securing finance may be repossessed if repayments are not maintained. Property values can fall as well as rise. Interest-only borrowing does not reduce the capital balance during the interest-only period, so borrowers should have an appropriate and realistic repayment strategy in place. A 100% LTV mortgage provides no initial equity cushion against a fall in the property value, and assets placed under management or otherwise provided as security may be at risk depending on the structure of the facility.