Large UK Mortgage for UHNW Jersey Resident

• Client: Jersey resident
• Property: Luxury property in Cheshire
• Property value: £6.5M
• Loan amount: £4M
• LTV: Approximately 62%
• Mortgage type: Interest-only
• Term: Five years
• Margin: 1.60% per annum
• Purpose: Equity release for investment into a separate business enterprise
• Early repayment charge: None

Equity release against an unencumbered property can provide high-net-worth borrowers with access to capital without requiring them to sell an existing asset. Enness was approached by a Jersey resident who owned a luxury property in Cheshire outright and was looking to release equity for deployment into a separate business enterprise.

The property was valued at approximately £6.5M, and the client required £4M of mortgage finance. This represented an LTV of approximately 62%, leaving substantial equity in the property following the transaction.

The client had three specific requirements for the proposed mortgage. Firstly, they wanted an interest-only structure. Secondly, they were looking for a margin below 2%. Finally, they wanted a facility with no early repayment charges, providing flexibility should they decide to repay the borrowing ahead of schedule.

As an ultra-high net worth individual, the client was well suited to the private banking market. However, securing finance against UK property for a non-UK resident can present additional lender considerations. Enness therefore approached a number of lenders to establish which could accommodate the client’s residency, the level of borrowing and the requested structure.

Initial lender pricing was generally between 1.85% and 2.00%. Enness then negotiated with a suitable lending partner to secure an exception to its standard pricing policy.

The resulting facility provided £4M against the £6.5M property on a five-year interest-only basis. The agreed margin was 1.60% per annum, below the client’s target of 2%. The private bank also agreed to waive any early repayment charge, giving the client additional flexibility over the timing of repayment.

The released capital was intended for deployment into a separate business enterprise, allowing the client to leverage existing property wealth while retaining ownership of the underlying Cheshire property.

This case demonstrates how private banking can provide flexibility for international borrowers seeking to raise capital against UK property. For non-UK residents, lender selection can be particularly important, as not every lender will consider lending against UK property where the borrower is based overseas.

Enness works with private banks and specialist lenders across the international mortgage market, including bespoke UK property finance and interest-only mortgages. The appropriate structure will depend on the borrower’s circumstances, property value, LTV, intended use of funds 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. Terms, rates, 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. Equity release increases the borrowing secured against the property and may increase the borrower’s overall financial exposure. Interest-only borrowing requires 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 understand the risks associated with using property equity to fund a separate business venture.