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Re- mortgage (Product Transfer) with better Loan to Value (LTV) :

Nishil and Sara bought their property 2 years ago and they planned an extensive renovation project, which is now complete. They had invited a local estate agent around and their renovation had added significant value to the property.

When their re-mortgage was due, we had contacted them to advise them that their current rate was due to expire. Grateful for the reminder, Sara spoke to our broker and discussed the new value of the property and works done.

We researched options based on the projected property value, and their current lender were still offering the most competitive rate.

However, when we obtained the lender’s options, they had valued the property lower than it was worth. The lender carries out valuations based on property data, and this data would not include any works done to the property.

As a result, the rate being offered was not truly reflected on the current value, but rather it was being based on the lenders indexed (automated) value.

However, as we were able to provide evidence of the renovation and a local estate agent value, this was reviewed by the lender’s Valuers. They agreed with the new valuation and the property value was manually updated on their system. Therefore, the lender was able to offer a much better rate based on a lower loan-to-value bracket.

Nishil and Sara were happy that they could stay with the same lender and reduce their monthly payments.

Please note, that the case study is based on a real-life scenario, but names have been changed due to client confidentiality.

Published March 2021.

It is important to take professional advice before making any decision relating to your personal finances. Information within this case study is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored advice and is for information purposes only.