How To Get A Multi Million Pound Mortgage
When you think of a multi million pound mortgage, you may think of London, but there's an increased demand for high-value properties across the UK as a whole.
Whether you're a first-time homebuyer or an experienced property investor, getting a mortgage for such a large sum of money can be a daunting task.
In this article, we'll guide you through the process of getting a million pound mortgage, including how to prepare financially, what to expect from lenders, and how to secure the best deal for your circumstances.
You may be looking to buy a luxury home or a portfolio of rental properties, but it's important to be aware of all your finance options and how to navigate their differences.
In This Guide:
What are the Difficulties of Getting a Million-Pound Mortgage?
You need a lender with an appetite for this market
- Even though you might be interested in a prestigious property located in a highly desirable location for high-end investors, it is still a riskier investment for lenders than financing a diversified portfolio of properties that include more affordable neighbourhoods.
- Therefore, finding a lender with experience in financing properties in this market area is crucial to obtaining the finance you need. Specialist lenders are more willing to lend money at this level and will be less likely to price their mortgage deals defensively.
So, which banks offer million-pound mortgages?
The majority of the UK’s familiar high-street banks offer mortgages of at least £1M. A handful will accept up to £10M mortgages - often by referral to their large loan teams or the private bank within their group (such as NatWest’s relationship with Coutts).
- But the availability of mortgage “products” doesn’t necessarily mean this will be the best lending for you.
- It may well be that the customised approach of a private bank, making individualised, case-by-case decisions, may suit you better.
- Some private lenders specialise in rural properties, for example, where there is considerable acreage in addition to a home and possibly additional outbuildings and rental units.
This is where the advice of a mortgage broker can be invaluable. Their job is to look across the whole lending market for your property finance, including small and large lenders, high street and private banks. At Clifton Private Finance, our broker team know the ins and outs of the market and with be able to assess what course of action is suitable for you.
Cost of borrowing vs flexible mortgage terms
We find that all our clients are looking for the cheapest possible rate on their mortgage finance.
- But getting your loan at the lowest rate is useless if a lender won’t meet the loan-to-value (LTV) you’re looking for
- Or if they can’t offer the length of fixed-rate term you want
- Or can’t take into account a range of assets and earnings for your application
High street lenders usually offer the most competitive rates. But they generally have a standardised decision-making procedure: you fit or don’t.
Specialist lenders and private banks are ready to take a more bespoke approach. They may be willing to consider your future financial situation, a range of multiple wealth sources, and your current earnings.
What Salary Do I Need for a Million-Pound House?
At this level of borrowing, conventional salary formulas don’t apply. But as a rule of thumb, you can expect to borrow up to four times your annual income.
While this is lower than the 4.5x or even 5x salary mortgage you might be able to get from a high-street lender for a lower-value property, a specialist mortgage lender can take a more holistic view of your financial circumstances. This flexibility could help boost your affordability if you meet the criteria.
Property value = £1M
15% deposit = £150,000
85% LTV mortgage = £850,000
Annual income required: £212,500
This means that if you're looking to secure a £1 million-pound mortgage or higher, using the guidelines above, you would need a salary of over £200K per year. However, we have relationships with lenders that can offer bespoke lending solutions that account for the value of your assets and complex income.
In addition to the substantial earnings required, the monthly cost of servicing a capital repayment mortgage of this size could be upwards of £4,000.
- This is where an experienced broker can help you with alternative ways of structuring the borrowing you need.
- You might want to consider an interest-only mortgage, for example, if you have other assets you'd ultimately wish to liquidate and repay your loan with.
What Deposit Do I Need for a Multi-Million Pound House?
Most high-street banks will look for substantial deposits on million-pound-plus mortgages.
Most lenders typically request at least 25% deposits, with the cheapest mortgage deals being offered for 40% deposits. Only a handful of high street names are willing to go as low as 10% deposit on high-value mortgages.
If you're struggling to find a loan at the LTV you need, our specialist mortgage brokers have expert knowledge of the market and can get you the best deal for your circumstances.
While you're here, see our complete guide on HNW mortgages and how to secure one.
Consideration of your future earnings for a large-mortgage application
Private banks may be more willing to stretch to the highest level of borrowing you need, offering up to 95% LTV for applicants with whom they want to build longer-term relationships and whose future earnings they can consider.
You may be working in a sector they understand well, where they can confidently predict future earnings, such as:
- The legal profession
- Elite sportspeople
How Can I Maximise My Borrowing on a Million-Pound-Plus Property?
If you want to put down just a 5% deposit to maximise your buying power or retain funds for renovations, a private bank will likely be your best option:
- Your broker might suggest an interest-only mortgage to lower your payments.
- If you earn a lot of money through bonuses, lenders may be willing to lend you up to 95% of the property value if you can make large repayments in the first few years.
- With a regular mortgage, you can only overpay by up to 10% per year during the fixed term.
- A specialist mortgage can allow you to make large repayments without being charged a penalty.
Securing a large mortgage against other assets
You may also have other assets we can draw upon to extend your borrowing power, such as:
- Rental properties (business or residential)
- A holiday home
- A boat/yacht
- Classic car collection
- Major artworks
- An investment portfolio
Using Lombard lending to extend your borrowing
Lombard loans, usually only available to private banking clients, can allow you to use your liquid assets as collateral against your mortgage borrowing. You can do this at a lower cost than securing against physical assets like property, which can take longer to sell.
Here are some collateral examples:
How to Get a Mortgage for £1 Million or Above
While getting a £1 million mortgage with a high-street lender isn't impossible, you will typically need a significant deposit and straightforward financial circumstances to fit the criteria. Mainstream lenders have specific eligibility criteria, which often become stricter the higher the proposed borrowing amount.
Private banks are likely to offer more flexible solutions, potentially even up to 95% LTV. Where high street banks cater to more clear-cut, traditional mortgage cases, private and specialist lenders are commonly less risk-averse and more open to complex circumstances.
You will still need to meet the private lender's criteria, but many of these banks specialise in high-value mortgages, and they will be more accustomed to the unique circumstances that can come with this territory.
Private and specialist lenders can factor in bonus income, offshore trusts, business assets and other properties. These lenders will typically take stock of your overall financial circumstances. If they want to cultivate a long-term relationship with you, they may offer bespoke mortgage services that can secure you the capital you need.
At Clifton Private Finance, we have long-term relationships with these lenders and can find you tailored finance products that you may not otherwise have access to.
If you want to get a full view of your options, consider working with a specialist mortgage broker. Book a free consultation below to see what we can do for you.
Going to a Private Bank for a Million-Pound Mortgage
Here's a summary of some of the advantages of private banks for this scale of borrowing:
- They can consider complex income from multiple sources
- This includes projected future earnings rather than just current earnings
- And entrepreneurs who may have a business to sell in the future to raise capital
The essence of private banking is its emphasis on relationship-building and developing an integrated understanding of a client's entire financial situation.
In the past, this might have involved an Assets Under Management requirement to move at least 50% of your holdings across for your private bank to manage.
And while clients can assess the pros and cons of an integrated service and may decide that it suits them, “dry lending” is now commonly available from private banks with no obligation to transfer assets.
- The ability to offer lending at an extended LTV may be a major attraction of private banking.
- But it will come at a higher cost, and it’s vital that you get good advice on transitioning away towards more competitively-priced long-term borrowing as soon as feasible.
- This may be via a remortgage to a lower LTV loan with the private bank once substantial capital repayments have been made.
- They could also provide more flexible finance options, such as interest only finance or bridge finance.
- Or, the best deal for you might then be available on the high street – and this is when using a broker who can give you advice across the whole of the market is crucial.
Foreign Nationals Buying Prestige UK Properties
Overseas buyers are often attracted to the UK property market as a haven for their capital. High-calibre properties allow them to acquire the total asset value they‘re looking for without the additional costs of multi-property ownership.
- UK lenders are very willing to work with high net worth overseas buyers. An experienced broker can advise on which lender will best match your requirements.
- UK mortgage brokers and private banks experienced in working with overseas clients can also advise on your eligibility for the Tier 1 Investor Visas for buyers of property valued at £2M+.
Buying a £1M+ Investment Property
Prestige UK properties are sought-after investments for overseas buyers, frequently retained as the “jewel in the portfolio” as a reliable store of capital and generating solid returns.
Multi-million-pound buy-to-let mortgages are also available at competitive rates for well-qualified investors.
To get an accurate idea of the deals available to you, speak with a specialist mortgage broker.
Specialist Brokers for £1M+ Property Purchases
You will want an experienced high net worth mortgage broker with extensive knowledge of the total lending market for financial decisions at this scale.
It’s about understanding both private banking sector and high street lending, and looking down the road to take care of your long-term interests. We’re not tied to any one lender.
James Caldwell, Director, Clifton Private Finance
To get a full idea of your options, call us at 0117 959 5094 or book a free, one-off consultation below.