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Home Improvements – Consolidation – Minimise Outgoings

How to save the clients current rate and minimise the increase to their monthly payment

Mr & Mrs Home-Improvements

The client’s scenario

Mr & Mrs were looking to remortgage to raise £38,500 for home improvements and £12,000 consolidation.

Completing with a second charge the client kept the current fixed rate of 1.45% and saved over £500 in monthly payments when compared to a full remortgage and avoided an ERC of £2,500.

Their existing mortgage was £120,000 with a high street lender on a fixed interest rate of 1.45%, a monthly payment of £400 and an early repayment charge of £2,500 until November 2023.

  • The LTV was 90% LTV
  • The client didn’t have any adverse credit to speak of but were declined by high street lenders due to credit score
  • The clients did qualify for 5 year fixed rate mortgage for the full £170,000 at 8%, meaning a new monthly payment of £1,330
  • We were able to do a £50,500 second charge at a rate of 9% for £423 per month and by keeping the mortgage on their low interest rate, the combined monthly payment totalled £823 per month = £507 lower than remortgaging and avoiding the £2,500 ERC

Broker referral fee is 25% of all revenue and in this case £757.50

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