Interest-only offset mortgage in Hertfordshire

Location: Hertfordshire

Loan Amount: £2,000,000

Finance Category: Residential Mortgage

The Story

A client in Hertfordshire contacted Fox Davidson and asked us to find a market-leading 5 years fixed-rate mortgage with an offset facility and furthermore, they required the £2m mortgage on an interest-only basis or as much as possible on an interest-only basis.

Offset mortgages are excellent for clients that have savings that may be offset against the mortgage. The savings balance offsets against the mortgage balance and interest are paid on the net balance only. These schemes are particularly useful for the self-employed who will save money each year to pay their tax bill.

The Challenge

The challenge, in this case, was twofold; the client required a fixed rate offset mortgage, and most lenders only offer offset mortgages on a base rate tracker basis. The other challenge was securing interest-only lending using only the sale of the property as the method of repaying the loan.

The Solution

We were able to secure a £2 million pound interest-only mortgage at a fixed rate of 2.07%. The mortgage was agreed with £1.8 million on an interest-only basis and £200,000 on a capital repayment basis. The rate was fixed for 5 years at a competitive rate and would work out cost-effective for the clients compared to the rate of interest they were previously achieving on their savings with their bank.

We set the loan up so that any savings offset against the mortgage would reduce the monthly payment. The loan facility also has the option to pay back lump sums off of the capital if required.


Fox Davidson

Fox Davidson is an award-winning team of property finance consultants. To discuss your property funding requirements, please email or call us on 0117 989 7950.

Sarah Fox-Clinch

Director & Property Finance Consultant

About: Sarah has been in the mortgage industry for over 20 years and has amassed considerable experience in complex lending situations. Her passion is assisting clients with high value transactions, property with acreage and lending based on complex income. Sarah’s work ethos is to focus on each individual and give the time and support needed to help them move forward with their lives.

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Quote: “Wanting to be someone else is a waste of who you are” – Kurt Cobain