With the date set for the 2025 British Motor Yacht Show, 15-18 May, it’s essential to equip yourself with the right knowledge before making a significant investment in a new motor yacht. Whether you’re a seasoned sailor or new to the world of boating, purchasing a motor yacht requires careful financial planning and consideration. In this guest blog, British Motor Yacht Show sponsors CGI Finance share essential insights to help you navigate the financing process of financing your dream motor yacht.
Understanding yacht financing
Before you set your heart on a specific motor yacht, it’s important to understand the various financing options available. Financing a yacht is quite different from financing a home or car, and it often involves specialised lenders who understand the intricacies of marine purchases. In addition, surveys which are carried out by qualified marine surveyors, are often required by financers to confirm the value of the vessel.
Types of yacht financing
1. Marine Mortgages
Marine mortgages are similar to traditional home mortgages, but they are designed specifically for boat purchases. These loans typically require a 30% + down payment and come with longer terms, often ranging from 10 – 15 years. Interest rates can be fixed or variable, depending on your lender’s offerings. The maximum term can be restricted by the boat age and purchase price. Much like a mortgage on your home, your boat may become repossessed if you don’t keep up with repayments.
2. Marine Loans
The main difference between a marine loan and a mortgage is that a marine loan is an unsecured agreement between the lender and the borrower, unlike a marine mortgage that is secured against the boat itself.
3. Personal Loans
If you have excellent credit and sufficient income, a personal loan might be an option. These loans are usually unsecured, meaning they don’t require collateral. However, they often come with higher interest rates and shorter repayment periods compared to marine mortgages.
4. Owner Financing
In some cases, the yacht seller may offer financing options. This can be an attractive option if the terms are favourable and it eliminates the need to deal with traditional lenders.
5. Other types of Yacht Financing
It may be possible to use equity in a property to release capital for yacht financing. This is an option open to those that may be asset rich but capital poor. There are lenders in the property mortgage market that can lend against the property to finance an asset purchase – even if considered a depreciating asset. These can be both 1st and 2nd charge mortgages, depending on personal circumstances. It is advisable to seek independent advice.
Preparing to apply for yacht financing
Assess your financial situation
Before applying for yacht financing, take a close look at your financial situation as lenders will examine your credit score, income, existing debts, and overall financial health.
Is your lender authorised and regulated?
Making sure the lender is authorised and regulated by the Financial Conduct Authority (FCA) is extremely important to ensure the borrower is protected. With a regulated product, the borrower will have access to the Financial Ombudsman Service if things do not go as planned.
Gather necessary documentation
Having the right documentation ready can streamline the application process. Commonly required documents are not dissimilar from when applying for a mortgage on a home or a personal loan, and may include:
- Proof of income (digital pay slips and/or a copy of your tax return)
- Personal financial statement
- Details of the yacht you plan to purchase
Many lenders will carry out their own Credit Check as part of the application process and regulated lenders will require proof of identity, usually in the form of a driver’s license or passport.
Working with a marine lender
Specialist marine lenders understand the unique aspects of yacht financing and can offer tailored advice. They often also have relationships with yacht brokers and can provide valuable insights into the buying process. The British Motor Yacht Show sponsor, CGI Finance offer a professional and comprehensive service with extensive knowledge of the market as well as an understanding of the costs of purchasing and maintaining a vessel. CGI Finance are FCA authorised, and propose flexible, tailor-made and exclusive finance plans to help you achieve your unique yachting or power boating plans.
Insurance and maintenance considerations
Yacht ownership comes with ongoing costs beyond the initial purchase. Insurance, maintenance, berthing and docking fees are essential factors to consider. A comprehensive financial plan should account for these expenses to ensure a smooth sailing experience. Insurance is required not just for the vessel itself, but also on the capital debt and to ensure the maintenance of payments in the event of illness or injury.
Visit the British Motor Yacht Show 2025 to explore your options and connect with industry professionals who can help turn your dream into reality. Whether you’re ready to purchase or just beginning to consider financing options, the knowledgeable team at CGI Finance is here to assist you. CGI Finance is a European market leader in the financing of pleasure boats. It has realised the dreams of thousands of clients for over 45 years. Subsidiary of the Societe Generale Group, CGI Finance offers personalised financing solutions. Take advantage of our experience and knowledge.
When exploring financing options, it is advisable to seek independent advice. Remember, your boat may become repossessed if you don’t keep up with repayments.