• Buying in: Chamonix
• Property price: €1,525,000
• Loan amount: €1,220,000
• Mortgage type: Mixed
• Mortgage term: 20 years
• Interest rate: 2.35% fixed
• Loan-to-value: 80%

The Background

Our clients, HNWI british residents wishing to buy a property in the French Alps, were seeking an Interest Only mortgage. Unfortunately, the bank thought that the level of savings was not high enough to cover 75% of the whole mortgage (which is a criteria to have an interest only mortgage).

Our Approach

We could find another solution by going for a mixed mortgage where 50% of the mortgage is interest only and 50% of the mortgage is a repayment mortgage. The advantage is part of the debt is being repaid over time (assuming you keep up with your mortgage repayments) and the monthly cash flow is less impacted thanks to the lower payments from the interest only part.

With this product, the life insurance (mortgage cover) was not mandatory: the clients could simply expand their current life insurance policy. In addition to this, we could go up to 80% loan-to-value without having to place any collateral or assets under management!