Remortgage Capital Raising With Annex Tenant

The Clients

The clients were a professional couple, both working as doctors, looking to remortgage their residential property. Their objectives were to raise capital for significant home improvements and to consolidate existing unsecured debts into a single mortgage. The property also included a self-contained annex occupied by a tenant.

The Challenge

The case presented two key underwriting challenges.

Firstly, the inclusion of debt consolidation meant many lenders would restrict the maximum loan-to-value, reducing available options.

Secondly, the presence of a tenant in a self-contained annex created a classification issue. Some lenders would treat the property as multi-unit or semi-commercial, while others would decline due to perceived letting risk.

The Solution

We reviewed lender criteria in detail and identified a lender prepared to treat the property as a standard residential home, with the clients occupying the main dwelling.

The application was supported with:

• A clear breakdown of the annex layout

• Confirmation of owner occupation of the main residence

• A full affordability assessment post-debt consolidation

• Details of the planned improvement works

By structuring the case within acceptable loan-to-value limits and presenting the property correctly, the application was accepted on a residential basis.

We secured the mortgage on the following terms:

• Property value: £1,000,000

• Loan amount: £565,000 (56.5% LTV)

• Rate: 3.65% fixed

• Term: 21 years

• Monthly payment: £3,241.14

The Outcome

The clients successfully remortgaged, raising funds for home improvements while consolidating unsecured borrowing into a single manageable payment.

Despite the complexity of both debt consolidation and an annex tenant, the case was completed as a standard residential remortgage. It demonstrates that, with the right structure and lender selection, more complex property scenarios can still be accommodated within mainstream lending.