Best Mortgage Deals
Advice, help, information and guidance on the best mortgage deals available

Marine Mortgages

best mortgage deals by AnnaJust like a property, you can finance your new yacht or boat with a marine mortgage. Whilst this is a specialist market there are several lenders both in the UK and Europe who can offer the best mortgage deals. However, unlike all the other mortgage markets there is one essential difference with a yacht -  it falls in value, rather than increases, which tends to dictate the types of finance the lenders are prepared to offer!! So let's look at the types of marine mortgages available from the various lenders.

Marine Mortgages Explained

The main difference with marine mortgages is that there is only one type available, and that's a repayment. Interest only mortgages are simply not an option, as the underlying asset ( the yacht) is decreasing in value, so to offer an interest only finance model would be absurd. However, having said that some mortgage providers do offer the option of interest only, but only in the first or second year, with the mortgage then reverting to a simple repayment. This often provides one of the best mortgage deals available, but they are not widely available and it will largely depend on your credit record. The marine mortgage itself is secured only on the vessel in question not against your house. In the event of defaulting on your repayment the finance company has title to your boat and can repossess it at any time.

Marine Mortgage Terms

Like a property mortgage, the marine mortgage is tied to the asset, in this case the yacht or boat. Unlike a house, the age and type of boat will have a huge impact on the terms that the lenders will offer. So for a new yacht, most lenders will consider a maximum term between 10 and 15 years, with a 20% minimum deposit, and repayment only. The minimum you will be able to finance is £25,000 at 80%, in other words the minimum value of the vessel has to be over £31,000 approximately to qualify for a marine mortgage. There is no upper limit to the amounts available on marine mortgages, which are limited only by your ability to repay. A specialist marine mortgage broker, will often find you the best mortgage deals, as they will often get better rates and discounts than you will by dealing with the lender direct, so give them a try.

Boats below this value can be financed with a marine loan. These are completely unsecured, a bit like a personal loan from a bank. They are available for amounts from £1,000 to £25,000 and are typically used for smaller value boat purchases such as dinghies and small inland waterway craft but can be also used for sails, engines etc etc. On amounts over £15,000 for boat purchases, a deposit of up to 20% of the cost may be required. Repayment options are generally between 2 and 5 years. Applications are often quickly turned round and funds can be available within a week but will depend on your personal circumstances.

Marine Mortgages For Liveaboard Boats

This is one of the most difficult areas for marine mortgage finance, and almost impossible to find the best mortgage deals. Some lenders will allow you to live aboard your boat, others will not, so you will need to shop around. One of the key conditions will be that you must have secured moorings with the proposed vessel for at least 12 months. There are several reasons this is such a difficult area. Firstly, some lenders consider live aboard options a bad risk, as it is often considered a cheap way of living if you cannot afford a bricks and mortar property. Secondly, the vessels tend to be much older. Thirdly a floating home can be more difficult to repossess than a conventional property, and finally this finance falls within the remit of the FSA, whereas marine mortgages for leisure craft do not. So all in all a bit of a difficult area.  Again, contact a specialist marine mortgage broker who should be able to help.

Yacht Registration

Every yacht must be registered and there are two types of registry. The first is the SSR or small ships registry which provides a cheap and simple alternative to full registration under the Merchant Shipping Act. The certificate of registry provided will give evidence of the British nationality of the ship when it is taken abroad. The register does not enable ownership of a ship to be established nor can marine mortgages be recorded.

Marine mortgage providers will therefore require you to provide full yacht registration which is recorded in Cardiff, as this allows the lender to have title to your boat, and to repossess if required.

Now let's look at how to find the best deals if you are looking for a currency  mortgage, which you may need if you have bought your boat and are now looking for the overseas property and a berth!

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