Case Studies

Summary

£997,000 remortgage on property value of £1,995,000

1.49% interest rate

Complex split bonus income remortgage affordably achieved

Our client

Our clients, a high earning married couple, were fast approaching their remortgage date and wanted to remortgage on the existing basis.

What was needed?

When Rose Capital originally arranged the clients’ current mortgage, we were able to achieve a borrowing income multiple of 5.75. (These multiples are based on annual income which lenders use to calculate how much a person can borrow.) The clients wanted to maintain their borrowing at the same level.

In addition, part of the lender’s borrowing calculation was based on the wife’s significant variable bonus income.

Plus, an existing split of repayment and interest only had been agreed to keep repayments down.

The clients wanted to maintain the income multiple, retain the repayment / interest-only split, and obtain a competitive interest rate.

What was the challenge?

Since Rose Capital first arranged the couple’s mortgage, the mortgage market has changed significantly.

Mortgage lenders have tightened their criteria and reduced income multiples which meant this couple were in danger of being unable to borrow the amount they needed.

Added to this was the complexity around the couple’s income circumstances. The husband had a new job, so had less of a salary track record with his new employer. His wife had significant bonus income, but lenders are acutely aware of the variability of this type of income and are wary when assessing this.

How we provided the solution

The clients consulted Bethany Smith, Associate at Rose Capital Partners, to understand how they could achieve their remortgage goals and so remortgage affordably.

Bethany researched the market and placed the case with a lender who would consider the most recent year’s bonus rather than an average of the previous 2 years, which most lenders will do. This was important because the client’s earlier year’s bonus was only around 20% of that paid for the current year, which would have made a sizeable difference to the lender’s calculation of their income.

This also meant that Bethany could move the clients to a much better interest rate with a new lender rather than being forced to do a product transfer with the existing lender.

The original mortgage was on a part repayment, part interest only split which was the clients’ preference to keep the monthly payments down. The clients were willing to change to a full repayment mortgage if they absolutely had to, but it was not their preference. Bethany secured a lender who was satisfied to continue the same repayment / interest only split that clients had before, so the clients were particularly pleased.

The clients were delighted that a lender could be found that would meet their complex remortgage requirements on an affordable basis.

What was the rate?

The rate was 1.49%