Key Facts:
- Client: Bulgarian National & Resident
- Property type: New Build Flat in Central London
- Property value: £850,000
- Loan: £520,000
- LTV: 61%
- Interest rate: 3.99%, 5-year fixed
When it comes to remortgaging in the current environment, there is one rule: move fast, so you don’t miss the boat. Interest rates are rising, and they will continue to do so, with some reports suggesting that the UK base rate will sit at 5.8% by next year (more than double the current 2.25%), which means that mortgages will only get more expensive.
In this case, were approached by an existing client, a Bulgarian national and resident, looking to remortgage their UK investment property. Conveniently located between Tech City and the Square Mile, the new build apartment was valued at £850,000 and was rented on an assured shorthold tenancy. The property had been purchased using bridging finance, and the client's outstanding balance with the bridging finance lender was £560,000.
Whilst purchasing a property with a bridging loan come with many advantages, such as rapid completion, flexibility and privacy, the client was eager to transfer to a standard BTL mortgage in light of the interest rate rise. Given the UK base rate will continue to rise and lenders will increase their mortgage rates along with it, longer-term fixed rates can be a great way to lock in the best rates and have clarity on mortgage spending over the next few years.
Despite the client having no financial footprint in the UK besides the investment property, we were able to move swiftly since all the necessary documentation was already in place. This mortgage application required specialist knowledge of lenders who would be comfortable offering a loan to foreign nationals with income generated in Bulgaria. Our broker successfully connected the client with a specialist bank that could offer them a competitive fixed-rate mortgage. With the maximum available loan amount of £520,000, the client was happy to cover the shortfall using their savings.
The Bank of England is raising the base rate quickly in a bid to strengthen the pound and battle inflation. As a result, mortgage rates are continually changing. Whether your present terms are coming to an end or want to explore a cheaper financial product than you are on already, contact Enness to have a no-obligation chat about your plans.
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