100% Finance - Example

If you raise a loan to fund the 30% for your deposit, the developer will make the interest payments for this amount on your behalf.  See the example below:

The developer will pay all loan repayments including interest payments on the 30% deposit until completion

30% deposit required (less £1000 reservation fee) within 45 days of reservation. Should you choose to borrow the 30% deposit, the developer will pay the loan repayments, including interest, for the 30% deposit until completion of the specific unit you have reserved. These payments will then be added to the purchase price upon completion.

Example (Sterling): Property price £200,000. £1000 reservation fee paid. The deposit = £200,000 x 30% = £60,000 - £1000 (reservation fee) = £59,000. Interest on £59,000 @ 6% p.a. = £295 per month, paid for 24 months by the developer = £7,080 added to the purchase price upon completion.

Due to the significantly discounted off-plan contract price and the capital appreciation during the construction phase, it is anticipated that the £200,000 purchase price will have grown to a property value at completion of circa £325,000.

At this point a 70% loan to value guaranteed mortgage is available and therefore you will be able to borrow up to £227,500. This is clearly ample to pay for the £199,000  (purchase price less £1000 reservation fee) that you owe as well as the accrued interest of £7,080 – from the above example.

Assuming you borrowed the maximum loan to value mortgage, available from the example above, you would borrow £227,500 on which the annual interest payment would be £18,200 based on a rate of 8%. The rental guarantee of 10% of your purchase price of £200,000 will generate you an income of £20,000  each year, which should cover your mortgage payments. If you wish you could retain the £59,000 loan you took out for the deposit, pay the interest yourself each month, from completion onwards, and use the money to invest in a further investment property purchase.

*Subject to status. Terms & conditions apply.

Please contact Phoenix Overseas - email info@phoenix-overseas.com