CLP's 4.75% "low start" Market Maker
including lender’s margin

The client owned a residential investment portfolio where he was borrowing £16.32 million.  This figure was based upon the traditional lenders formula of using 80% of the rental income (125% interest cover) to service the debt – loan to value 64%.

CLP have introduced the Low Start Market Maker

This is a 30 year loan structure which provides an interest rate of 4.75% fixed including lender’s margin for the first 6 years, rising after 6 years to 5.95% for the balance of the 30 year term. There is a lender’s only option to break after 6 years (without penalty).

By using the CLP Low Start Market Maker the clients’ loan increased by £4.08 million (25%) to £20.4 million and at the same time reduced his mortgage payments (initial interest only) by £51,000 p.a.

(The rate is a function of the money market and can fluctuate daily.  The above example is based upon a fixing on 26 January 2007).

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