An experienced portfolio landlord with a mixed-use commercial and residential property wanted to lower their borrowing costs after being stuck on an 8.5% interest rate. We helped them secure a 5-year fixed rate at just over 5%, saving them over £1,800 a month.
The Challenge
The client faced a few hurdles in securing the required borrowing:
- Mixed-Use Property Complexity: The ground-floor shop and flats above were held on a single title, which many traditional high-street lenders view as high risk.
- Specific Property Risks: One of the units was a studio flat, which caused hesitation among lenders due to perceived difficulties in selling or letting.
- High Interest Rates: The existing rate of 8.5% was placing a heavy burden on the portfolio’s cash flow.
The Strategy
To overcome these challenges, we crafted a detailed application highlighting the client’s 25 years of property management experience and the steady income of the portfolio:
- Specialist Lender Alignment: We engaged directly with relationship managers and alternative financing specialists who understand semi-commercial and mixed-use properties.
- Proposal Tailoring: We emphasised the financial logic of the refinancing and the strength of the client’s track record to alleviate underwriter concerns regarding the studio unit.
- Lowering Borrowing Costs: We locked in a competitive 5-year fixed rate, significantly reducing the client’s interest payments.
The Results
- Total Loan Amount: Just under £1 million
- Mortgage Structure: 5-year fixed rate
- Previous Interest Rate: 8.5%
- New Interest Rate: Just over 5%
- Monthly Savings: Over £1,800
- Key Outcome: Substantially improved the portfolio’s cash flow and secured long-term financial stability for the client.
Why This Matters
For property investors, being trapped in high-rate commercial loans can impede their ability to raise capital for property investment. Refinancing mixed-use assets into a more favourable long-term structure frees up liquidity, allowing you to maximise the yield of your portfolio.
Speak to a Specialist
Ready to remortgage to release equity or refinance your semi-commercial property? Book a consultation with our team today.