Aria Finance recently arranged a £250,000 residential second charge mortgage at 75% loan-to-value, completing the transaction in under four weeks. The loan was structured on an interest-only basis with a two-year fixed rate, enabling the client to fund a substantial property extension while maintaining their existing first charge mortgage. This case demonstrates Aria Finance’s expertise as a second charge mortgage broker, particularly in securing higher LTV interest-only solutions within tight timeframes.
The Client:
The client was a residential homeowner living in a five-bedroom detached bungalow valued at £1,150,000. Planning permission had already been approved to extend the rear of the property and add an additional floor. The works were scheduled to be carried out in stages and were expected to increase the property’s value to approximately £1,500,000 upon completion.
The Situation:
The client required £250,000 to fund the extension and structural improvements. They wanted to raise capital without remortgaging their existing first charge mortgage, which was on a competitive fixed rate running until 2028. Redeeming the first charge early would have resulted in significant early repayment charges, making a remortgage unsuitable at this stage.
The key challenge was sourcing a lender willing to provide an interest-only second charge mortgage up to 75% LTV. The lender also needed to understand that the works would be completed in stages and be comfortable assessing the future uplift in value. In addition, the client required a fast completion in order to secure contractors and begin the project ahead of spring. The transaction required a full valuation, which added further time pressure to the process.
Our Solution
Aria Finance utilised its extensive panel of specialist second charge lenders to identify a funder that could offer a two-year fixed rate on an interest-only basis up to 75% LTV. The selected lender had a pragmatic underwriting approach and experience in cases involving staged structural works.
The interest-only structure allowed the client to maximise their residual monthly income during the build period, while the two-year fixed rate aligned with their wider financial strategy. The intention is for the client to review their options and potentially remortgage onto a new first charge product once their existing fixed rate concludes in 2028.
Despite the requirement for a full valuation and detailed underwriting assessment, Aria Finance delivered the funding in under four weeks by proactively managing the process from submission through to completion.
Benefits & Results:
Aria Finance secured a £250,000 residential second charge mortgage at 75% LTV on an interest-only basis, enabling the client to begin their property extension without disturbing their current mortgage arrangement. The structure ensured affordable monthly payments during construction and supported a clear long-term refinancing strategy.
The works are projected to increase the property’s value from £1,150,000 to approximately £1,500,000, representing a significant uplift in equity. By arranging the correct second charge solution quickly and efficiently, Aria Finance ensured the client could commence works ahead of seasonal demand and contractor availability.
This case highlights Aria Finance’s ability to source high LTV second charge mortgages, structure interest-only second charge loans, and deliver fast completions for residential homeowners undertaking major property improvements.
