£1.2m interest only loan for expat property investor

The Scenario:

A British expat client based in Singapore was seeking a loan to buy an investment property for £1.6million in Bath. He was looking to borrow 77% of the purchase price on an interest only-basis and needed a flexible drawdown facility with no penalties.

The client was a high net worth individual earning in excess of £500k per year. However, he was a non-dom paying no UK tax, his salary was paid in Singapore Dollars and he had various complex income streams.

Because of these factors, plus the large loan size, high LTV and the need for an interest-only loan, no high street lender was willing to provide the necessary funds. 

Our Solution:

A deal was found with a private bank who specialises in expat finance. They were willing to lend the full £1.23 million the client required (77% of the £1.6m purchase price) on an interest only basis for 5 years.

The bank agreed to the flexible drawdown facility with no penalties at a very competitive rate of 2.75% (2.5% above the Bank of England Base Rate). We negotiated a 0.5% reduction in the interest rate after 2 years, provided a 20% reduction in the loan’s capital was made every year.

This highly competitive loan deal meant the client was able to move forward with their investment purchase while minimising the interest rate on their loan, maximising their return on investment.