Interest only mortgage with flexible overpayment for UK expat in Bahamas

Area
Bath
Capital Raised
£1.35M

Some lenders won’t touch expatriate mortgages. Others change their criteria, leaving even their established borrowers high and dry on a standard variable rate, when their fixed term comes to an end. A well-connected broker will find the lender who will consider your circumstances in the most favourable light.

The Scenario

Our client is the CEO of a financial services company in the Bahamas who owns a £3.5M Grade II-listed rural property outside Bath where his wife and children live while the children are at school.

His fixed-rate mortgage had ended four months previously and reverted to his lender’s SVR: their lending criteria in relation to expatriate borrowers had changed and they weren’t willing to offer him a new fixed-term rate.

As a result he was paying a hefty 4.99% while he tried to find an expatriate lender who would give him the level of borrowing he needed.

Some lenders treat tax-free expatriate earnings as though they will be taxed, and then take off an additional 25% to allow for currency fluctuations. So once you’ve lost half your income to a notional highest-rate tax band, and another 25% off the top, even the most generous expat remuneration package won’t support a mortgage of this size.

And then he came to us.

The Solution

There were a few major issues that needed to be worked around.

  • The estate to be mortgaged included, as well as the main house, outbuildings and a former church which were rented out. Some lenders aren’t happy with high-value properties which have residential and commercial properties included on the same title. 
  • Our client has quite a “lumpy” salary package that varies considerably from month to month. He wanted an interest-only remortgage that offered the flexibility to overpay substantial amounts each year.
  • The set-up fees on a mortgage of this size can be substantial: a typical expat lender might charge 1.5-2%, which would add up to a hefty £20,000.

We sent our client’s CV along with the property details to a specialist building society who then felt sufficiently confident in his background, and the relatively low level of exposure, to be able to offer a very competitive three-year discounted expatriate mortgage at less than half the SVR he had been paying.

The mortgage product is interest-only, but allows over-payment of up to a substantial 20% per year, which suits our client’s remuneration pattern.

What’s more, the lender contributed £700 towards the valuation costs, and charged a flat-rate product fee of just £850.

It was a quite a complex arrangement, but we had an agreement in principle that was being actively progressed by the lender within three days.

Jack Spillane

Finance Broker

Bristol

0117 959 5094

Is your situation similar to this? I specialise in helping clients who need creative development finance solutions, and second-charge mortgages. Give me a call any time and we can set up a detailed discussion of the finance you need.

Mathew Phillips

Finance Broker

Bristol

0117 959 5094

Are you in a similar situation? I specialise in bridging finance at Clifton Private Finance - I will find you the best funding solution for your property transaction.

Alex Chambers

Senior Finance Broker

Bristol

0117 403 4324

Are you in a similar situation? I am a specialist in residential and investment property finance for UK and international clients at Clifton Private Finance. Please don't hesitate to get in touch for a no-cost discussion of the finance you need.

Luther Yeates

Senior Finance Broker

Bristol

0117 244 5561

Are you looking for a similar type of property finance? I have extensive experience finding residential and investment property finance for UK and international clients. Please get in touch and we can arrange a time that's convenient for you to discuss your situation.

Sam ONeill

Senior Finance Broker

Bristol

0117 959 5094

Is your situation similar? I am a bridging finance specialist at Clifton. I can find a quick, cost-effective solution for the funding you're looking for.

Robert Gibb

Senior Finance Broker

Bristol

0117 959 5094

Are you looking for mortgage or short-term finance for residential or buy-to-let property (including HMOs)? I have extensive experience in finding property finance solutions for UK and international clients, both as individuals and limited companies. Please give me a call and let me see what I can do for you.

Adam Arnott

Associate Director

Bristol

0117 205 0214

Is your situation similar to this? I have extensive experience of advising clients who need creative property finance solutions. Please get in touch and we can arrange a time that suits you for a detailed discussion of your requirements.

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