Scenario:
The client was purchasing a new home valued at £3.1 million and had a 5% deposit available. They had recently been promoted to partner at a leading law firm and were seeking a mortgage that reflected their new income level.
Challenges:
The low deposit meant that most mainstream lenders were unwilling to assist, as they typically required a minimum of 15% for loans of this size. The client had previously approached a private bank that was willing to consider a high loan-to-value loan , but they were unable to offer 95% ltv. Additionally, as a newly promoted partner, there had been a significant recent increase in income, which not all lenders were able to assess favourably.
Solution:
Magni Finance approached a private bank familiar with the client’s firm and their partner remuneration structure. The bank offered a 95% loan-to-value facility, structured on a part interest-only basis to meet affordability requirements. Due to their previous experience lending to partners at the same firm, the bank was confident in the client’s future income trajectory and comfortable approving the loan. This enabled the client to proceed with the purchase without increasing their deposit.
Key figures:
Property value: £3.1 million
Loan amount: £2.94 million
LTV: 95%
Repayment type: Part interest only
Product type: 5 year fixed
Interest rate: 5.69%