Type of Lending
80% LTV interest-only mortgage, maximising affordability through the consideration of multiple income streams.
The Borrower
The borrower is a self-employed client with a diverse income profile, including:
- Self-employed consultancy business income
- Land & property income
- Investment portfolio income (sterling-based).
The client has a 20% deposit and a clear repayment strategy in place. The primary repayment vehicle is the future sale of property (covering 75% of the loan), with the remaining 5% supported via a pension lump sum.
Interest-only is preferred due to the variable nature of the borrower’s income, enabling consistent monthly commitments while allowing flexibility to make lump sum repayments when surplus funds are available.
The Challenge
The borrower required a lender able to take a holistic view of affordability across multiple income streams, including:
- 100% of latest-year self-employed income (salary, dividends, and retained profit)
- 100% of land & property income as evidenced on SA302s
- A proportion of investment portfolio income (sterling) treated as notional income.
- Higher leverage at 80% LTV on an interest-only structure
- Flexibility to support a multi-part repayment strategy
The challenge was to reflect the full strength of the borrower’s income profile while maintaining a prudent and sustainable lending approach.
The Solution
Hodge were able to support the case through a flexible underwriting approach to multiple income sources.
Consideration was given to:
- 100% of latest-year self-employed income, including salary, dividends, and retained profit
- 100% of verified land & property income supported via SA302
- Investment portfolio income (sterling) assessed as part of overall affordability
- We also assessed affordability on an interest-only basis, maximising affordability.
The result
As a result, Hodge were able to offer:
- 80% LTV interest-only mortgage
- 75% of the loan supported by sale of property as the primary repayment vehicle
- 5% supported via an additional suitable repayment vehicle (e.g. pension, investment, or other asset)
- Flexibility to make annual lump sum repayments of up to 10% of the original loan balance.
This structure enabled the borrower to maximise affordability while maintaining a clear and credible repayment strategy.
Why Hodge
This case highlights how Hodge supports borrowers in achieving their holiday let ambitions through flexible criteria and practical, common-sense lending.
The Hodge Holiday Let mortgage is designed to help first-time landlords take the first step, and support landlords with small portfolios to maximise both rental income and personal enjoyment of their properties.
