Our client owned two non-standard Buy-to-Let (BTL) properties, both of which had mortgages that had reverted to high variable rates. Their current lender couldn’t offer new fixed rates for these loans. Given the fast-rising interest rates, failing to secure fixed rates would have led to substantial costs for the client.
We arranged the necessary borrowing at a low 5-year fixed rate by internal remortgaging with the client’s existing bank and securing two new mortgages with a specialist bank.
The first property was a leasehold comprising six self-contained flats. Our challenge was to find a lender comfortable with multiple units on a leasehold title, as most prefer multi-unit freehold properties. To overcome this, we submitted a business case featuring title plans and legal advice, demonstrating that the lender could sell each flat individually in the event of repossession.
The second property was a Grade II listed farmhouse, converted by the client into four terraced houses. Two were sold on long leases, and the remaining two end-terraced properties were kept on the freehold. This mix of non-standard properties fell outside most lenders’ criteria.
We identified a lender offering an exclusive 5-year fixed rate suitable for both properties. However, a down valuation of the multi-unit property by the lender’s valuer meant the total loan offered was insufficient to cover both mortgages.
Since the application had already been underway for weeks, no other lender could match the 5-year fixed rate on offer. The client also owned a third property, built of timber, for which he had a fixed-rate mortgage with a lender offering the best deal for this property type.
After discussing this timber property’s refinancing with the client’s lender, they agreed to waive the exit penalty if the client switched to a larger loan at a higher rate. After evaluating all options, we determined that refinancing the third property at the higher rate was the most cost-effective solution overall.
After months of diligent work and negotiations, we successfully fixed the client’s three mortgages at 5-year rates just above 3.5%. This new arrangement will save the client over £500,000 over the next five years.
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