Re Funding
Guys,
Just for clarification regarding funding and the guarantor position.
If Virgin were to guarantee the loan, thats all they would be doing. It would fall on you to repay the loan regardless of your employment status. The only eventuality where Virgin would have to step in is if you were to have to declare yourself bankrupt. That is not a position you want to be in, especially if you own any property.
With regards to the funding - be wary! The finance ATPL finance offer is 2.99% + Standard Trusts reference rate of 2% (total 4.99% currently).You have no control of this referance rate and purely relates to their cost of capital to lend you the money.
BBVA currently lends at 3% plus base rate which is currently 0.25% (total 3.25%) with base rate looking low for a long time it could be potentially cheaper whilst your loan capital is high during your first few years. However it was announced today that in the coming years it may start to rise as inflation does.
Make sure you look into the funding carefully. If Standard trusts cost to capital ratio increases you can be sure that your "all in rate" will increase aswell (and im not sure how they propose their 2% rate).
If base rate rises you will be hit by the increase cost- especially if this happens when the capital element of you loan is so high in the initial years.
I work in banking and ran a few models (base rate models) and these are only rough indications and do not take into account potential increases to base nor the fact the loan will be drawn down in tranches (i.e my assumption is that all 109K is drawn from day one). m
at 109K borrowing over 9 years at the current rate (3.25) you would pay 1,165 per month with a total cost to you of £125802.19 over the 108 months of repayment.
The same for standard trust would be £1253.39 per month with a total cost over 108 Months £135,366.89
These are only indicative figures and will move dependant on how much you borrow and the rates obtained by yourself.