• Buying in: St Gervais les Bains
• Property price: €280,000
• Loan amount: €210,000
• Mortgage type: Interest only
• Mortgage term: 14 years
• Interest rate: 2.35% fixed
• Loan-to-value: 75%

The Background

Having just sold their business, our clients made a lifestyle purchase for family holidays. Because of their strong and straight forward profile, we had many financing solutions available to this couple looking to buy a second home in the Alps. 

Our Approach

We offered as many solutions as possible for the clients to pick (capital repayment loan, interest only, high loan to value, low rates, etc…)

The clients chose an interest only over a 2.35% fixed rate repayment mortgage at 75% LTV. While it may seem more costly, there are various ways to make this option work for you. For example, a fund manager confident that he can generate a 7% annualised return would probably go for interest only. This way in 10 years time he will have nearly doubled his initial investment. 

With no perspective of rental income on the French property to offset part of the mortgage, but plenty of capital to invest, they chose to make their money work for them in other ventures and have the lowest monthly cost possible.