The Funding Question:
Increasing Your Mortgage. |
If you have sufficient equity in your property you would probably be borrowing at around 3%. You will be receiving a feed in tariff in the region of 8% thus meaning that you will be in a positive cash position immediately. Plus you have the savings on your energy bills.
Working on the example we have detailed for Mr P here and assuming that Mr P borrowed £8,000 (roughly 50% of the total installation) the interest charge on that amount at 3% would be £240. Assuming also that you look to repay the loan as soon as possible and that you apply all the additional income to the repayment of that loan:
|
 |
[CLICK TO EXPAND] |
|
Clearly by using someone else’s money and paying the interest (and capital) out of the proceeds of the investment you substantially increase the return on your own money.
If you have sufficient equity to finance the full investment you are in effect gaining ‘free money’ as the income from the FITs repays both loan and interest. After around 12 years the income from the FITs and the energy savings revert to the investor as shown below: |
 |
[CLICK TO EXPAND] |
|
During the period of the loan (and beyond) it is possible to estimate an enhanced capital value to the property.
|
|
IMPORTANT NOTE:
It should be clearly understood that the information provided within the sections 'Increase Your Loan' & 'Personal Loan' are for illustrative purposes only.
EcoSaveit are not Independent Financial Advisers and do not offer financial advice. The amounts anticipated from the Feed InTariffs are estimates and are not guaranteed which means that they could actually yield more or less than shown here.
If any clients wish to use any funding in order to finance the installation of a Solar PV installation the responsibility for which method or lender is chosen remains entirely with the client. |
|
|
