The Scenario
In Upavon, Pewsey, Wiltshire, a couple sought to remortgage their jointly owned buy-to-let property. They were living in army quarters and aimed to refinance their existing mortgage with NatWest, which was nearing the end of its term, and secure additional funds for a future property purchase.
The property, currently generating a rental income of £1200 per month, was set to increase to £1400. This increase was a key consideration, as it would impact their ability to raise the desired amount. The clients required a lender that could consider the projected rental income and allow for top-slicing to meet their borrowing needs. Additionally, they preferred a long-term, interest-only mortgage fixed for five years to provide rate stability and flexible repayment terms, and effective financial planning for their next investment.
The Challenge
The main challenges included:
- Rental Income Consideration: Identifying a lender willing to consider the future rental income projection of £1400.
- Top-Slicing: Ensuring the lender’s criteria allowed for top-slicing, enabling the clients to raise the desired funds.
- Timely Processing: Finding a lender with a swift approval process to avoid the standard variable rate (SVR).
- Long-Term Flexibility: Securing a product with a 25-year term and interest-only repayment structure to maximise cash flow and flexibility.
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The Process
A detailed approach was implemented to meet the clients’ specific needs. Key steps included:
- Lender Selection: Skipton Building Society was identified as the ideal lender, offering competitive five-year fixed-rate products and accommodating rental income projections and top-slicing requirements.
- Rate Analysis: Focusing on products with interest-only repayment terms to enhance cash flow for future investments.
- Application Management: Ensuring a swift and efficient application process to prevent the clients from moving onto the SVR.
- Fee Management: Arranging for all fees to be added to the loan, preserving the clients’ liquidity for other financial goals.
The Solution
The selected mortgage product with Skipton Building Society offered the following benefits:
- Five-Year Fixed Rate: Providing predictable payments and stability, aligning with the clients’ preference to avoid refinancing within five years.
- Interest-Only Structure: Maximising monthly cash flow and facilitating future investment opportunities.
- Rental Income Consideration: Using the projected rental income of £1400, enabling the clients to borrow the desired amount.
- Flexibility: Allowing the use of additional income sources to support borrowing.
- Fee Addition: Adding fees to the loan balance to preserve cash reserves.
The Outcome
The clients successfully secured the remortgage with a long-term, interest-only product tailored to their goals. The five-year fixed rate ensured predictable payments and allowed them to focus on identifying and purchasing their next investment property. The smooth and timely process with Skipton Building Society prevented the clients from transitioning to the SVR, saving them unnecessary costs.
The clients expressed satisfaction with the personalised solution, highlighting the efficiency and expertise provided throughout the remortgaging process.
Conclusion
This case exemplifies the importance of understanding unique client goals in buy-to-let remortgaging. By selecting a lender that accommodated future rental income projections and top-slicing, we delivered a solution that maximised flexibility and set the stage for the clients’ next investment. Ready to optimise your property portfolio?
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