Find out how we helped our portfolio landlord successfully purchased their 12-bed MUFB from a subsidiary to a Limited Company, saving over £130,000 in interest payments by securing a competitive buy-to-let mortgage rate.
At a glance:
- A portfolio landlord with 14 rental investment properties
- A MUFB with 8 units and four townhouses purchased within our client’s subsidiary holding company
- Our client wanted to purchase the property into his Limited Company
The Case:
Another mortgage broker approached us for support with placing a complex case for their property investor client. At age 75, the client had over 50 years of experience in the property investment industry. His diverse portfolio consisted of buy to let properties, Multi-Unit Freehold Blocks (MUFB), and commercial properties.
Our client was looking to purchase his existing MUFB and the four properties on the grounds from his subsidiary holding company and into his property-holding SPV Limited Company, which already owned 100% of the subsidiary company shares. Our client originally purchased the property in 2010 and renovated it from a large period house with an additional three houses built on the grounds.
The Challenge:
The primary challenges here were the company structures and finding a competitive rate for our client.
Firstly, the client wanted to ensure the purchase was not complicated by background company structures within the subsidiary company. Therefore, we needed the lender to underwrite the mortgage based on the director and major shareholder of the company, not the background of the nominal shareholder.
Furthermore, the client held a commercial mortgage against the property. The lender’s commercial product transfer rates were from 6.89%*, so our client wanted to explore the buy to let options to see how much they could save. Whilst the property met the lender’s buy to let criteria, we wanted to do our due diligence first to ensure our client’s case would be accepted. Fortunately, MFB benefits from having a number of dedicated underwriters and weekly visits from Business Development Managers, allowing us to discuss complex details face-to-face.
Having thoroughly discussed the client’s circumstances and the case, the lender confirmed they would be happy to accept. We managed to save our client over £123,000 in interest payments over the 5-year period with a buy to let rate compared to the commercial product transfer details, leaving our client and the introducer delighted with the outcome.
The Finance:
Property value: £2,060,000
Loan amount: £1,545,000
LTV: 75%
Rate: 5.29% 5-year fixed*
Term: 9 years, interest-only
Monthly mortgage payment: £7,083
Lender arrangement fee: 4% (£61,800)
*Rates as at December 2024
Next Steps
If you have a similar case you would like to discuss, get in touch, and one of our expert mortgage brokers will be happy to advise.
