- Client: British National & Resident
- Property Type: Detached House
- Property Value: £1,100,000
- Loan Amount: £715,000
- LTV: 65%
- Interest Rate: 2.89%, 5-year fixed
Enness was approached by a client looking to remortgage a buy-to-let property in order to release capital towards the deposit for a new property purchase. The existing property was valued at £1.1 million, with the client looking to raise £715,000 through the remortgage.
The property was owned in the client’s personal name and had previously been occupied by family members before being converted into a buy-to-let investment. Although the property had been let for a relatively short period, this created an additional consideration when approaching lenders, as some lenders have specific requirements around rental history and the length of time a property has been let.
The client’s objective was not simply to refinance the existing mortgage, but to structure the facility in a way that would release sufficient equity to support the next property purchase. This meant finding a lender comfortable with both the property’s circumstances and the proposed capital raising.
Enness assessed the client’s requirements and identified a lender able to accommodate the transaction. Following negotiations, a mortgage was secured at 65% loan-to-value with a competitive fixed rate of 2.89% for five years.
The resulting structure allowed the client to refinance the existing buy-to-let property while releasing capital for the deposit on a further property investment. The five-year fixed rate also provided certainty over the mortgage payments for the agreed fixed-rate period.
Remortgaging can be used for more than simply replacing an existing mortgage. For property owners with sufficient equity, it can provide a way to raise capital for further investments or other financial requirements. However, lenders will assess the property, existing borrowing, rental position and the intended use of the additional funds when considering an application.
This case demonstrates the importance of finding a lender whose criteria align with the individual circumstances of the property and borrower. A relatively short rental history can narrow the available lender pool, but a specialist broker can identify lenders with the appropriate appetite and negotiate a suitable structure.
If you are considering remortgaging a buy-to-let property to release equity for another investment, Enness can assess your circumstances and explore available finance options. To discuss your requirements, speak to a mortgage specialist.
Risk Warning:
Remortgaging increases or restructures borrowing secured against your property. If you do not keep up with repayments, your property may be at risk of repossession. Releasing equity also increases the amount owed against the property and may increase the overall cost of borrowing.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal or tax advice. Finance is subject to status, underwriting, affordability, property assessment and lender criteria. Terms and availability will vary depending on individual circumstances.
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.
