The interest only mortgage fits better what the client wanted (tax optimisation) as it kept his cashflow as low as possible while still reducing the income tax bill on the rental income.
The private bank offered a 1M€ loan on a 2.7M€ Off-Plan property with a collateral of 1M€ pledged against the mortgage. The collateral will be invested as per the client’s choice (advisory mandate).
It is a 5-year variable rate, renewable for another 5 years, based on the Euribor 1-month + the bank’s margin (cost of funds).
No life insurance was required as the loan is backed up by the assets under management (A.U.M.).
* The rate / the product may differ to what is currently offered since this mortgage has been agreed.