Million-pound mortgages – How to get the best rates
The country continues to see an increase in properties worth more than one million pounds. A million-pound mortgage is now more common than ever.
While private banks were traditionally able to offer this level of borrowing, high street lenders are now able to do so. Private mortgage lenders are the most popular for a million-pound mortgage.
We’ve created this guide for a million-pound mortgage to help you get the necessary information. You’ll find out how to apply, how much you can expect to pay monthly for million-pound mortgages, and more.
Million mortgage calculator
If you are looking for a calculator for a million-pound mortgage, then see our mortgage calculator below which will give you rates and monthly repayments.
Can you get a £1 million mortgage?
Yes, provided you meet the eligibility and affordability requirements of the mortgage broker for this type of lending.
It is often down to which bank you prefer, a high-street bank, a smaller private bank or private mortgage lenders.
Private banks are more likely to hold a greater share of the multi-million-pound mortgage market because they have more financial flexibility. However, high street lenders are increasingly willing to lend on higher-value properties – this should not be overlooked. Both have pros and cons.
Benefits of working with a specialist broker or private bank
There are many reasons to go private to get a million-pound mortgage.
More flexible affordability criteria
Private banks have a long history of dominating the high-value mortgage market. This is due to their flexibility in accepting applications.
Private banks are more open to taking risks and will consider your assets more than your income. Private banks will consider bonuses, shares, and other assets that regular lenders may not. Private lenders also offer mortgages that are based on income from pensions.
They may be better than high street banks if you have unique income streams or are self-employed and hoping to get a UK mortgage based upon foreign income.
2. They often offer greater financing options
Private banks often offer flexible terms. It is more likely that you will be able to get an interest-only mortgage or a lower loan to value (LTV).
3. They are often experts in million-pound mortgages.
The service you get is an indication of the premium you are paying. Niche banks can offer a more tailored customer experience and can be more efficient in completing deals. Million-pound mortgages are their speciality.
Benefits of using a traditional lender
Customers choose to go with a high-street lender for…
1. They are easier to find
Private banks may require you to introduce yourself or meet other criteria before you can talk to them. High street banks are more open to discussion, however.
They aren’t necessarily less qualified, just because they are easier to access. High-street lenders may have specialist teams that deal only with large mortgage loans.
2. These are often simpler.
It can be seen as a strength that the traditional lender’s ‘rigidity is’.
The mortgage application process can be straightforward to understand. Their acceptance criteria are quite clear, so if you submit your application correctly and meet the requirements, you will likely get approved.
3. You may pay fewer fees
Although the level of service may not be as good as private banks, it can often save you money.
How to get a £1 Million mortgage
These are the steps you need to take to ensure your application is successful.
- Get your documents ready: There may be additional scrutiny about your ability to pay for a large mortgage. It can help you save time and cut down on paperwork. Our guide to mortgage applications contains a complete list of all the documents you need.
- Optimize your credit reports: Even if you have a mortgage of more than £1 million, your credit report could make a big difference in the interest rate that you get. Before you apply, downloading your credit reports and removing any errors is a good idea.
- Talk to a mortgage broker: There is a market for mortgages of up to £1 million. It’s possible to save time and money by speaking to one before approaching a lender. A broker can help you identify the best lenders for high-value deals. They may also access brokers-only lenders that offer customized deals to customers who take out large mortgages.
Send us an enquiry and we’ll match your query with a broker that helps people get £1,000,000 mortgages daily.
What amount of income do you require?
It all depends on whether you go private or to a high-street lender. The affordability calculations of a conventional lender are usually based on your salary. This can be up to 4.5x your average income or up to 6x in sporadic cases. A percentage of your annual bonus will be considered by some lenders, but rarely the entire premium.
They will also consider your fixed costs. This can include everything from childcare to gym memberships. This is known as stress testing.
Private lenders can be more flexible. Private lenders are more flexible and will likely review your application. They will consider your salary, plus any additional income streams such as your pension or rental income from a mortgage.
Some lenders will consider vehicles or other luxury items as collateral for a loan. This is known as a secured loan.
Requirements for deposits
Higher-value loans may be subject to income caps by some high street lenders. Many high street lenders won’t lend more than 75-80% LTV over £1,000,000, regardless of your income or other factors. This means that you will need to deposit at least 20% to be eligible for the finance you need.
If your application is robust and you have minimal risk factors (such as bad credit history), getting a £1,000,000 mortgage might be possible without the same deposit requirements. In these conditions, you can theoretically get a mortgage with a 5-10% deposit.
What could your monthly payments be?
It all depends on what kind of arrangement you make. You can take a mortgage on £1,000,000 on either a repayment or interest-only basis. This could last from a few years to 35 years.
Your perceived risk profile, just like with smaller loans will impact your monthly payments. It can also affect the loan-to-value (LTV), that the lender offers.
Your credit history and any credit problems that you may have, the amount of your deposit, and the type of property you are looking to purchase can all impact your risk profile.
What is the interest rate?
Your interest rate will be determined using the same factors as any other mortgage application. The rate your mortgage lender offers you will be determined based on the risk involved in the deal. This will depend on how much deposit you have, credit reports and other risk factors.
A lender might offer a customised agreement on your terms and rates if you are a person of high net worth. These deals are often very attractive to mortgage providers.
Mortgages to buy-to-let
There are one million pounds buy-to-let mortgages available, but terms may vary.
Lenders view buy-to-let as a higher risk and expect you to put down a more significant amount. A 25% deposit is standard. However, some lenders will allow you to put down as little as 15% in certain circumstances. Private banks might be more flexible.
High street lenders may also require minimum income requirements. A lot of mainstream lenders won’t approve a BTL mortgage for anyone earning less than £25k. However, some will consider projected rental yields. 125-130% is the minimum mortgage payment.
Private lenders may factor in additional income. It may be possible to obtain a mortgage with bonus income or capital from property, savings, or pensions.
Many buy-to-let mortgages are interest-only. Continue reading to find out what an interest-only mortgage for £1,000,000 could look like.
Mortgages with interest-only terms
There are Interest-only mortgages that are this large. They have similar restrictions to smaller interest-only loans. While it is more likely that you will find interest-only mortgages from a private lender than from the high street, you should not rule out the possibility of finding them.
A larger deposit is a good rule of thumb. Most lenders won’t lend more than 75% loan-to-value (LTV), but a few will allow for 80% or even 85% depending on the circumstances.
Remember that some high street lenders place LTV caps on high-value loans, which supersede all other factors. Regardless of other factors, they won’t lend more than 75% on £1,000,000.
Monthly payment of less than one month is the main benefit of an interest-only mortgage. The entire mortgage balance is due at the mortgage term.
Your lender will ask you to show a viable repayment plan. In other words, they want to see if you can pay the principal amount.
Match you with a mortgage broker
Brokers are skilled in arranging mortgages up to £1,000,000 and more. Talk to one of these brokers to learn about your options.
These brokers can help you get the best deal possible because they have the experience and knowledge to do it. Specialist lenders can offer better terms for mortgages above £1 million. However, you will often need to use a broker to get these mortgages.
Our broker-matching service is free and will quickly assess your circumstances to match you with an advisor specialising in £1,000,000 mortgages. To get started, enquire today.
Is it possible to get a commercial mortgage for 1,000,000 pounds?
Commercial mortgages exceeding one million pounds are expected today due to the high valuations of commercial properties.
It’s not impossible to obtain one. You can find out more about high-value commercial mortgages.