Client background
Our clients, were keen on purchasing a second home without selling their current residence first. Mrs, a partner at a prominent accountancy firm, boasted a substantial annual income. Their existing property had a predominantly paid-off mortgage, forming a solid base for their upcoming mortgage for buying a second home.
The initial problem
The couple faced a challenge: they aimed to buy a new main residence valued at £1.6 million and needed to raise a mortgage amount for the full purchase price plus stamp duty. This transaction required flexible mortgage features, as they planned to eventually sell their current home to offset the new mortgage balance and reclaim second-home stamp duty. Critical to their strategy was securing mortgage arrangements without early repayment charges, a necessity to facilitate a smooth future sale. Furthermore, they needed lenders who acknowledged the nuances of partnership income and accommodate the multiple mortgages in play.
Mortgage for buying a second home solution
Our broker stepped in to address these hurdles comprehensively. We devised a dual-lender strategy that involved refinancing the existing home and simultaneously securing the purchase of the new property. Each selected lender was fully briefed on the overall financial landscape and the role of the other, ensuring a harmonious execution of the plan.
Our choice to use competitive tracker mortgages was pivotal. These products not only featured no early repayment charges, crucial for our client’s flexibility in selling their current property, but also allowed them to benefit from competitive interest rates that had no early repayment charges.
The mortgages were arranged on an interest only basis to keep cashflow as healthy as possible during this period of multiple mortgages. Once the current home is sold, the no early repayment charge feature will allow for a substantial mortgage reduction and renegotiation of the terms to capital and interest to ensure the mortgage is fully repaid at the end of the mortgage term.
Outcome and benefits
The result exactly met the specifications; the couple purchased their second home successfully, adopting the plan that accommodated significant future flexibility. This will also allow them to manage their resources effectively post-current home sale, substantially reducing their mortgage liabilities and reclaiming paid stamp duties.
Key Takeaways:
Importance of flexible mortgage products: For clients looking to buy before selling, choosing the right mortgage product, especially those without early repayment charges, can provide essential financial leeway.
Utilising income profiles effectively: High-income individuals, particularly those with partnership statuses, can use their earning reputation to secure favourable mortgage terms, provided they opt for informed brokers who understand how to leverage this income.
Strategic financial planning pays off: The synchronised use of two informed lenders can facilitate complex transactions, offering the client significant benefits compared to if they had worked with a more traditional financing structure.
The information presented in our case studies is intended for illustrative and marketing purposes only. Some case studies may be based on multiple enquiries or hypothetical scenarios to demonstrate typical processes or outcomes. Not all case studies represent completed business transactions, and the inclusion of a case study does not imply that the business was successfully concluded.
This article is based on information available on the date of issue, 4th August 2025.
Please remember that your home could be repossessed if you do not keep up with repayments on your mortgage.
