Case Study –Second Home Mortgage | Low Deposit

Value	£1,900,000
Loan	£1,710,000
Location	Hampstead
LTV	90%
Achieved Rate	5.64% (3.39% above base)
Completed	December 2022
Adviser	Jamie Roberts

The Client

Our clients were looking to purchase a second residential home for £1,900,000 and wished to borrow £1,710,000 to finance the transaction. They were looking to secure this facility on an interest-only basis over a 10-year term.

They were looking to proceed on a 90% LTV variable term tracker, as they had been aggressively reducing the debt on their main residence, which meant they only had a 10% deposit.

As a partner at an LLP specialising in patent and trade mark law, the nature in which the client is paid means that significantly large sums are added to their income throughout the year, which would allow them to reduce the loan amount quickly over a shorter term.

The Solution

The important factors to consider with this application were the high loan-to-value and lending amounts required. The majority of high street lenders would restrict their LTV at 70-85% when borrowing at this level. The client also wanted interest-only, which most high street banks would cap at 75%. The client was also purchasing a second residential home within close proximity to his existing one. This required a justification that most high street banks would not be comfortable with. The solution was to proceed with a private bank. Investec was the best fit for this as they were able to lend at high LTVs on an interest-only basis, provided they were comfortable with the client’s profile.

The Henry Dannell Difference

To ensure the lender was comfortable with the overall profile, the case had to be packaged and submitted to the provider to allow them to understand clearly what the client required and why they should lend to them. In turn, this allowed the lender to offer a high LTV at a level above £1m. As this was secured via a private bank, it would have been difficult for the applicant to approach the lender directly without a pre-existing relationship. The benefit of using Henry Dannell is the knowledge we have in this space and the relationships we have with private banks, enabling us to find suitable solutions for clients with more complex cases such as this.