• Buying in: Les Gets
• Property price: €925,000
• Loan amount: €736,000
• Mortgage type: Mixed (IO + Repayment)
• Mortgage term: 14 years Interest Only / 20 years repayment
• Interest rate: 2.35% fixed (Interest Only) and 2.25% fixed (repayment)
• Loan-to-value: 80%

The Background

Our client, a High Net Worth Individual, british resident, wanted to buy a property in the French Alps. However, his search for a property was a bit rocky between vendors pulling out at the last minute due to a change of heart, a failed negotiation to reduce the purchase price of another property… The 3rd time’s a charm as we say!

Our Approach

The client wanted an interest only mortgage but the bank, especially post Brexit, felt that it was more sensible to offer a mixed mortgage (max LTV of 80%) where 50% of the mortgage is interest only and 50% of the mortgage is a repayment mortgage. The advantage is that 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. And the bank did not even require a collateral (asset under management) to pledge against the interest-only mortgage.

Also, the life insurance (mortgage cover) was not mandatory, which was good as the client already had existing policies in the UK.