Experienced landlords wanted to transfer multiple properties from personal ownership into a new SPV Limited Company, a process complicated by the company's complex structure and lender criteria. Using our expertise and strong lender relationships, we secured competitive rates with a lender that understood our client's needs.
At a glance:
- Long-term MFB clients with a £2.8 million portfolio of flats, houses, and MUFBs.
- Incorporating their portfolio into a newly formed SPV Limited Company.
- Seeking the cheapest 5-year fixed rate due to a substantial loan amount
The Case
Our experienced landlord clients had eight properties held jointly in their personal names. Having consulted with a specialist accountant, they decided to transfer their portfolio into a newly formed SPV Limited Company to help improve their long-term tax efficiency.
As legal ownership of our clients’ properties, including flats, multi-unit freehold blocks, and a house, was changing from personal name to a Limited Company, the applications needed to be processed as purchases rather than standard remortgages.
This resulted in loans totalling £2.1 million; naturally, our clients’ priority was to keep interest costs down and secure the most competitive 5-year fixed rate. To achieve this, we needed to consider the overall cost of each option, including arrangement fees and added charges, not just the initial rate.
The Challenge
The main challenge with this case was that the SPV Limited Company also included a holding company. Not only did we need a specialist lender experienced in dealing with the complex incorporation process, but it also had to accommodate the non-straightforward company set up.
Limited to the specialist buy to let lender market, where mortgage interest rates are typically higher due to the risk they take on, we had the additional challenge of finding the most competitive rate to keep our clients’ costs down.
After carefully reviewing the market, we found a lender offering the best 5-year fixed rates available for our clients. After we submitted the application, we continued to monitor rates right up to completion, ensuring our clients benefited from any rate reductions. When two rates changed during the process, we acted quickly to secure them, maximising savings and delivering the best possible outcome.
The Finance
Property 1
Property value: £370,000
Loan amount: £277,500
LTV: 75%
Rate: 5.19% fixed for 5 years*
Term: 25 years
Monthly rental income: £1,800
Monthly mortgage payment: £1,654
Lender arrangement fee: Free.
Property 2
Property value: £380,000
Loan amount: £285,000
LTV: 75%
Rate: 5.19% fixed for 5 years*
Term: 25 years
Monthly rental income: £1,800
Monthly mortgage payment: £1,699
Lender arrangement fee: Free.
Property 3
Property value: £400,000
Loan amount: £300,000
LTV: 75%
Rate: 5.19% fixed for 5 years*
Term: 25 years
Monthly rental income: £1,800
Monthly mortgage payment: £1,788
Lender arrangement fee: Free.
Property 4
Property value: £585,000
Loan amount: £438,750
LTV: 75%
Rate: 4.99% fixed for 5 years*
Term: 25 years
Monthly rental income: £2,400
Monthly mortgage payment: £2,575
Lender arrangement fee: £1,999
Property 5
Property value: £350,000
Loan amount: £262,500
LTV: 75%
Rate: 5.19% fixed for 5 years*
Term: 25 years
Monthly rental income: £1,950
Monthly mortgage payment: £1,564
Lender arrangement fee: Free
Property 6
Property value: £200,000
Loan amount: £150,000
LTV: 75%
Rate: 5.19% fixed for 5 years*
Term: 25 years
Monthly rental income: £1,200
Monthly mortgage payment: £894
Lender arrangement fee: Free
Property 7
Property value: £310,000
Loan amount: £232,500
LTV: 75%
Rate: 5.19% fixed for 5 years*
Term: 25 years
Monthly rental income: £1,600
Monthly mortgage payment: £1,386
Lender arrangement fee: Free
Property 8
Property value: £270,000
Loan amount: £202,500
LTV: 75%
Rate: 5.19% fixed for 5 years*
Term: 25 years
Monthly rental income: £1,500
Monthly mortgage payment: £1,207
Lender arrangement fee: Free
Rates as at July 2024*
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