Key facts:
- Penthouse in Islington, London
- Property value: £4,200,000
- Interest rate: 2.99% above BoE base rate
Arranging a high-value bridging loan for a luxury penthouse.
I had a client recently that wanted to buy a £4.2m penthouse in Islington, London.
The client wanted to complete the purchase without putting any money down as a deposit. I, therefore, needed to raise a mortgage against his farm (also worth £4m) outside of London, in order to use as the deposit on the new Penthouse. On top of that, I needed to raise a mortgage against the penthouse in order to make up the balance. Learn more about million pound mortgages.
The client needed to complete within a month. This would not have been achievable for a standard lender, given the restrictive timescales.
Normally, this would require a bridging lender to take both properties as security to obtain the 100% financing required to purchase the new property. Bridging lenders often charge between 0.48%-0.85% of the loan pcm for this type of high value mortgage, in addition to a 2% lender fee, which on a £4.2m loan is rather hefty!
I, however, was able to get a private bank to produce a formal offer within just 2 weeks, meaning the client was ready to complete. This is faster than many bridging lenders.
The interest rate was just 2.99% plus BoE base rate, with only a 1% lender fee - a huge saving for the client. Moreover, the loan was full interest-only which gave the client reduced monthly payments.
I was able to get the private bank comfortable with the lender, by using the client's HNW status.
They also gave the client a 5-year term on the mortgage, meaning he wasn’t forced to repay the loan within a year, which is a typical bridging loan term. Another bonus for the client.
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