- Client: International property investor
- Property: Villa in Italy
- Property Value: Approximately €3 million
- Loan: Up to 100% of the purchase price
- Term: Seven years, interest-only
Enness was approached by a client looking to purchase a villa in a prime location in Italy. The property was intended to be used as a family holiday home, with the client spending time there with their children. Longer term, the family also wanted to keep open the possibility of relocating to Italy.
The client identified a villa valued at approximately €3 million and wanted to structure the purchase in a way that preserved as much of their existing capital as possible. An interest-only mortgage was particularly attractive, as the client wanted to avoid monthly capital amortisation and keep the borrowing aligned with their wider financial plans.
Finding a lender willing to offer this structure against an Italian property required careful consideration. The client was particularly focused on securing competitive pricing while retaining flexibility around how the purchase was structured.
Enness identified a banking partner able to offer a seven-year interest-only facility at a margin of 1.25% over three-month EURIBOR. The lender was also prepared to finance up to 100% of the purchase price, subject to the client establishing a private banking relationship equivalent to 30% of the loan amount.
The bank was also comfortable with the property being acquired through a corporate structure rather than in the client’s personal name. This provided an additional layer of flexibility and allowed the financing to be structured around the client’s preferred ownership arrangements.
The resulting facility gave the client the opportunity to acquire the Italian villa without contributing the full purchase price from their own capital, while the interest-only structure kept monthly repayments focused on the cost of borrowing rather than capital amortisation.
The case demonstrates how an international property purchase can sometimes require a financing structure that goes beyond a conventional residential mortgage. Where a client has substantial assets and is willing to establish a wider banking relationship, private bank mortgage solutions can provide additional flexibility around leverage, repayment structures and ownership arrangements.
For clients looking to purchase property in Italy, Italian property finance can also involve considerations around jurisdiction, ownership structure and the source of funds. Enness can assess the wider financial position and identify lenders suited to the individual circumstances.
If you are considering purchasing property overseas and want to explore the available financing structures, 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, valuation, lender criteria and any applicable private banking requirements. Terms and availability will vary depending on individual circumstances. 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.
