CASE STUDY
Overview
Placing high loan-to-value mortgages on an interest-only basis is notoriously difficult, particularly at 90% LTV. But for clients with clear repayment strategies and strong financial profiles, it can be the most suitable option.
In this case, we structured a 90% LTV interest-only mortgage on a £2 million property for two professionals seeking to retain capital for renovation, while keeping their repayment vehicle tied to the eventual sale of the property. Our understanding of private bank lending enabled us to achieve what’s typically outside standard policy.
Client Profile
• Professions: Family Tax Adviser and Fashion Consultant
• Property Value: £2,000,000
• Loan Amount: £1,800,000
• LTV: 90%
• Mortgage Product: 2-Year Fixed
• Repayment Type: Interest-Only
Client’s Objectives
The clients were seeking a high LTV mortgage on an interest-only basis in order to retain funds for substantial renovations. Their plan was to aggressively pay down the loan over the short term and sell the property at the end of the mortgage term, using the sale proceeds as the repayment vehicle.
The Challenge
We secured a self-build mortgage with a specialist lender, offering a 2.55% discount on the Standard Variable Rate. Interest-only lending at 90% LTV is typically not available through mainstream lenders and is generally capped at much lower LTVs, often around 50%.
We also had to navigate several other complexities:
- One applicant changed employment mid-application, triggering additional underwriting scrutiny
- Credit teams required detailed clarification on income, long-term feasibility, and the proposed repayment strategy
- The lender repriced rates just three days prior to exchange, requiring rapid coordination to lock in the new, more competitive rate
All of this had to be managed in real-time, with no room for delay.
Our Solution
The clients were referred by a professional advisory firm that had previously worked with us and trusted our expertise in high-LTV, specialist mortgage placement.
We immediately identified that a private bank would be the most appropriate route. Our experience with private bank lending meant we knew where and how to position the case to maximise the likelihood of success.
We prepared a comprehensive credit proposal in advance of submission, detailing:
- Both applicants’ income and financial background
- The rationale for interest-only borrowing at high LTV
- The exit strategy via sale of the subject property
Because of the depth of information we provided upfront, underwriting queries were minimal, and the process moved forward efficiently. When rates were unexpectedly reduced just before exchange, we acted immediately to secure the improved terms at the same borrowing level.
Why Henry Dannell?
This case highlights the value of detailed preparation, expert lender knowledge, and strategic positioning. We understood exactly how to match our clients’ needs with the right lender, and how to anticipate and mitigate challenges before they become obstacles.
Our clients have since confirmed that they wouldn’t go anywhere else, having received a level of insight and care that far exceeded expectations.
This is a case study and not indicative of typical results. Past performance is not necessarily representative of future results. This information is for general purposes only and does not constitute financial advice. Please seek professional advice before making any financial decisions.
Please note: a mortgage is secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. Please also note: The Financial Conduct Authority does not regulate most forms of buy to let mortgage.
