Jamie first started considering buying his first property at the beginning of 2022. He had been living with family in Watford since Covid - initially for support, and then to save up for his deposit. In his job as a software engineer, Jamie had managed to save a £14,250 deposit - saving was made easier whilst living at home with his family. As his deposit increased, he started looking at options to buy his own place more seriously. With a 2-year old daughter, he was desperate for some more space - living in one room with a toddler was proving challenging, and the time had come for a new start. 

Jamie knew from the offset that it could be a struggle to get on the ladder. He was set on living in St Albans, near to his family and not too far from his work. Properties in St Albans are “pricey” (the average flat in St Albans goes for a whopping £342,441), as Jamie puts it, so he understood that some additional help might be needed for him to buy a place there.

Starting his search

He had initially started his search looking at standard mortgages, meaning his maximum borrowing was capped at 4.5x his salary. And despite earning £53,000, the maximum loan size just wasn’t enough to buy what he wanted in St Albans. Whilst some lenders might stretch affordability for occupations they deem “professional” (such as doctors, or accountants), Jamie’s occupation as a software engineer didn’t count for this, and he was unable to access the 5.5x borrowing that some lenders offer for professional earners.

Finding Tembo

Knowing that his income was limiting the amount he could borrow, Jamie went hunting for solutions. He came across Tembo looking for a way to stretch his affordability, and was initially looking at adding a family member as a guarantor through an Income Boost. After some initial exploration with his potential Booster, Jamie realised this wouldn’t work out. Then, he came across Ahauz on a separate search (a company that offers private equity loans to prospective buyers). A private equity loan boosts a buyer’s budget by topping up their deposit with a second charge mortgage secured against the home. This means that buyers can increase their budget and get on the ladder sooner. 

Luckily, Tembo had just become the sole advisor of Ahauz equity loans, and the two companies could work together smoothly to pass over the relevant information. Jamie had built up a good relationship with his Tembo mortgage broker, Geraldine, so the process from there was easy - as Jamie says, “he didn’t have to do much” and everything was managed between the two companies organising both the equity loan and his first time buyer mortgage. 

Making home happen

When Jamie first came across the private equity loan, he immediately knew it was the right solution for him. He really considered the “future impact” that the loan would have, and knowing that there was no early repayment fee was reassuring as Jamie plans to pay back most of the loan with a lump sum in the future. Ahauz offered him this safety margin to have the flexibility of early repayment, rather than just paying off the monthly interest, meaning that managing the loan is sustainable for Jamie. 

With a deposit of £14,250 of his own savings, Jamie topped up his downpayment on his property with a £42,750 equity loan provided by Ahauz. This gave him a total deposit of £57,000. Tembo then arranged Jamie’s £228,000 loan so he could buy his £280,000 house in St Albans.

Jamie pays back the equity loan at a 6.99% interest rate for a five year fixed term making his monthly payments £249. He has the choice to either pay back the capital on the loan when he moves property (and the capital amount will come off the sale price), or pay back the capital earlier with a lump sum.  

Jamie’s mortgage of £228,000 is with Halifax on a five year fixed at a 2.43% interest rate, making his monthly payments £731. With total monthly payments of £980, and the flexibility to pay off the capital on the equity loan whenever best suits him, Jamie feels very comfortable managing his monthly repayments. 

Where they are now

Jamie has already moved into his new place with his partner and 2-year-old daughter - a 2 bed maisonette in St Albans. Having the extra space has been a necessity for his family, after a few years of living out of one room together. Talking about whether Jamie would recommend the equity loan, he said that the product would be a “life saver” for many of his friends. Knowing that a lot of friends are in a similar position to him (keen to get on the property ladder, but limited by income), Jamie said that an equity loan would often be the only way for them to feasibly get on the ladder in the near future.