Refinancing an existing home to buy the flat below and preserve future conversion flexibility

One building. Two titles. An opportunity that could not be treated as a routine purchase.

The client lived in the upper flat of a converted Victorian property and already owned the freehold of the building. The leaseholder of the garden flat below wanted to sell, creating a rare chance for the family to bring both homes under common control.

Her longer-term intention was to merge the two flats and restore the building as a single five-bedroom family home. The immediate priority was to acquire the lower flat, with the legal and physical conversion expected only after at least two years.

• The existing mortgage covered only the upper flat The current lender already held security over one part of the building, so a separate purchase mortgage on the lower flat would not necessarily create a clean overall security position.
• The freehold and leasehold interests had to be understood together The lender needed to be comfortable with the present title structure as well as the client's intention to change it later.
• Speed mattered, but future flexibility mattered too The finance had to support the acquisition without forcing the title merger, building works and fresh valuation into the same transaction.

Replace the existing borrowing and fund the purchase through one coherent residential refinance.

Steve identified a lender prepared to refinance the client's existing mortgage while also providing the additional borrowing required for the adjoining-flat purchase. The proposed facility therefore addressed the current debt and acquisition as one structure rather than layering a second mortgage onto the building.

The mortgage was arranged on a capital repayment basis over 27 years, within the client's intended retirement horizon. The application was based on her employed salary and bonus without relying on her husband's self-employed earnings.

A two-year fixed period created a deliberate review point.

The client expected the property itself to change in the future. A two-year fixed rate therefore aligned the mortgage review with the likely timing of decisions about merging the titles and undertaking the building works.

A longer fixed period could have offered more payment certainty, but it might also have created more friction if the client later needed lender consent or a refinance when changing the security. The selected product also allowed annual overpayments of up to 10% of the outstanding balance, giving the client scope to reduce the debt more quickly if future income or bonuses allowed.

The shorter fix also brings refinancing risk sooner, a conscious compromise where flexibility mattered because the property was expected to evolve.

The borrowing was structured around the acquisition; the later conversion remained a future stage.

The new mortgage was arranged to combine the existing borrowing with the funds required for the lower-flat purchase. The later title merger and conversion works remained future stages and are not presented as completed in this case study.

The mortgage decision also considered family resilience and the later property project.

The client had employer-provided income protection and Death in Service benefits, but Steve recommended separate decreasing-term life cover aligned to the full mortgage amount and 27-year term. The recommended cover also included waiver of premium. This was advice rather than evidence that protection had already been placed.

Steve also recommended that the client's husband consider matching cover. His income was not needed for the mortgage affordability assessment, but his contribution to childcare and household support had clear economic value for a family with three young children.

The eventual merger of the flats was deliberately kept outside the initial mortgage transaction. Before changing the titles or carrying out material works, the client would need to consider lender consent and take appropriate legal and property advice on the proposed conversion.

Understanding this type of adjoining-property purchase.