How careful structuring helped a client unlock equity and move forward.
The Situation
Our client is a self-employed dentist going through the process of divorce. As part of the financial settlement, she required £200,000. The solution lay in her property, a substantial unencumbered home valued at almost £1 million that was in the process of being transferred into her sole name as part of the divorce proceedings.
With the title transfer already submitted to the Land Registry and an update pending, the timing of the application needed to be managed carefully. The goal was to secure a remortgage against the property to release the funds required to meet her settlement, while keeping ongoing costs as low as possible.
The Challenges
A number of factors required careful consideration in structuring this case.
The most immediate practical challenge was the property title. The transfer from joint to sole ownership was underway but not yet complete, meaning lender selection and application timing needed to account for this. Evidence of the transfer request and the divorce proceedings was essential in presenting the case clearly.
On income, our client operates as a sole trader and had two years of strong, consistent self-employed earnings on record, supplemented by rental income from a freehold dental practice she owns. Both income streams needed to be presented accurately and supported with the appropriate documentation to satisfy affordability requirements.
Outgoings were relatively straightforward, though an outstanding personal loan with monthly repayments was factored into the affordability assessment.
The Approach
Given the loan-to-value was modest, affordability and product selection were the primary focus rather than any concern around security.
We identified a lender comfortable with sole trader income assessed across two years of tax calculations, with rental income from the freehold practice considered alongside self-employed earnings. The income picture was consistent and well-documented, which helped to present a clean and credible application.
On product structure, an interest-only mortgage was selected to keep monthly outgoings as low as possible. The repayment vehicle is the eventual sale of the property, which the client anticipates will occur around retirement . An 18-year term was agreed to align with that plan. The client is also likely to make voluntary capital repayments of up to 10% per year, providing flexibility to reduce the outstanding balance over time should her circumstances allow.
A five-year fixed rate was chosen to provide certainty over a meaningful period. With no plans to sell or review the mortgage within that window, and genuine concern about the direction of interest rates, the five-year fix offered the right balance of security and value. The product fee was added to the loan to avoid an immediate outlay.
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The Outcome
A remortgage was successfully secured on an interest-only basis, at a competitive five-year fixed rate, with a term structured to align with the client’s retirement plans. Monthly payments were kept to a manageable level, reflecting the interest-only structure and the low loan-to-value ratio.
The funds released will be used to meet the financial settlement arising from the divorce, allowing our client to draw a line under that chapter and move forward with clarity and financial stability.
Looking Ahead
With the remortgage in place and the property title transferring into her sole name, our client is in a strong position going forward. Her income is consistent, her property equity is substantial, and she has a clear long-term plan for how the mortgage will be repaid.
A protection review has also been scheduled to assess her existing life policies and establish whether her current cover – including any critical illness element – remains appropriate for her circumstances as a single homeowner. This will ensure her financial plan is properly protected as she moves into this new chapter.
