Remortgage to Invest in Property: How One Family Leveraged Equity Through Interest-Only Buy-to-Let Financing

Customer Overview

Two sisters in their late 40s, working as independent contractors, recently inherited a mortgage-free property in southern England. Together, they wanted to make smart use of their inheritance by investing in a new buy-to-let property, despite not yet identifying a specific one to purchase at the time of application. They were interested in options for an Accord Mortgages remortgage in 2025 to align with their goals.

Challenges They Faced

Although the inherited property was mortgage-free, the sisters faced several hurdles when exploring financing options to leverage its equity:

• Lack of permanent employed status—both worked as contractors with no regular earned income.
• Many lenders require a minimum of six months’ property ownership before considering a remortgage.
• They needed flexibility—low monthly payments and an interest-only option to maximize rental income.
• They were seeking a future property investment but hadn’t secured one yet, posing a challenge for standard lending criteria.

Our Remortgage Solution

Given the unique circumstances, we recommended a tailored remortgage solution through Accord Mortgages. Here’s how the deal was structured to meet all their objectives, including considerations for a potential remortgage in 2025:

• Loan Amount: £275,800
• Term: 10 years
• Repayment Type: Interest Only
• Fixed Rate: 4.18% for five years
• Purpose: Capital raising for future Buy-to-Let investment property

This lender was selected specifically because:

• No earned income requirement—rental income from another property met affordability criteria.
• Willing to allow capital release from an inherited property with no six-month minimum ownership clause.
• Supportive of a buy-to-let scenario with an interest-only structure, keeping monthly repayments low.

Benefits & Financial Outcomes

This bespoke financing arrangement gave the sisters:

• Capital Release: £275,001 from their inheritance, tax-efficiently transitioned into a new investment strategy.
• Low Initial Payment: £967.77/month for the first five years—a strategic advantage for property investors.
• Strategic Fixed Rate: Payment stability during crucial income years while they continue property investment planning.
• Future Flexibility: No tie-in after initial fixed rate period, and up to 10% overpayment per year without penalty.

“We really appreciated how Deal Direct found a lender who would work with our situation. Without fixed salaries or an identified property to buy, we were struggling. This gave us peace of mind and the capital we needed.”

Key Features of the Recommended Mortgage

• Interest-only basis using the sale of the property as the repayment vehicle
• Affordable arrangement/admin fees added to the mortgage, with full transparency of interest implications
• Early repayment flexibility starting after 5 years with clear penalty structure beforehand
• Legal and valuation assistance included, helping reduce upfront costs
• Ability to overpay by 10% annually for potential interest savings

Frequently Asked Questions

Can I remortgage an inherited property before owning it for 6 months?

Most lenders require six months of ownership, but specialist lenders like Accord Mortgages may waive this—particularly for inherited properties and investment goals, setting options for remortgaging into 2025.

Can I get a mortgage without a fixed salary?

Yes. Some lenders accept rental income or contractor income in place of a fixed salary. Your options may be more limited, which is why working with a whole-of-market broker is crucial.

Is interest-only a good mortgage option?

It can be, especially for investors. You’ll pay less monthly, boosting rental profitability, but must ensure you have a solid repayment plan—like selling the property.

What are the early repayment charges with a fixed mortgage?

This case included a stepped penalty structure starting at 5% and dropping to 2% by the end of the fixed term (year 5). Always calculate these if you may repay early.

What documents are needed to apply for a remortgage?

You’ll typically need identification, proof of ownership, income documentation (including rental statements), and details on debts or other mortgages.

Planning to Reinvest Your Inheritance or Property Equity?

Whether you’re dealing with an inherited property or seeking to expand your investment portfolio, our specialists at Deal Direct Financial Solutions can help you structure the right remortgage—full market access, transparent advice, and personalized service.

Let’s find your best mortgage today.

Contact us for a free consultation.