Getting a £5 Million Mortgage

Mortgages worth £5 million or more are not as rare as you might think, although they can be difficult to obtain through high street lenders. However, there are plenty of mortgage options for high-net-worth individuals (HNWIs) looking to borrow for a variety of reasons.

In this article, we will look at the benefits of borrowing for HNWIs, how to apply for a mortgage in excess of £5 million and the eligibility requirements for a loan of this size.

Can you get a mortgage worth £5 million or more?

Yes. Mortgages of this size are not usually available through mainstream lenders with rigid lending criteria and maximum loan value. They cannot factor complex income streams into their assessment process. However, some specialist providers deal in high-value mortgages and adopt a more flexible approach to lending.

In many cases, affordability is the primary concern. If you can demonstrate affordability, you should be able to find a lender who will approve your application.

However, finding specialist lenders can be a challenge without an experienced broker to assist you. Indeed, some of the best deals are only available through a broker.

We work with brokers who specialise in helping HNW mortgage customers (as defined by the Financial Conduct Authority) finance property purchases and remortgages at bespoke rates according to their unique circumstances.

Deposit and affordability requirements

Mortgages of £5 million and above don’t always need to meet strict eligibility criteria. Specialist lenders comfortable dealing with complex wealth scenarios will often tailor their offer to your circumstances, and there is room for negotiation, which you don’t have with mainstream mortgage applications.

It is difficult to give precise figures regarding deposit requirements and loan-to-value (LTV) ratios, but as a guide, many lenders will expect a deposit of between 40% and 50%. However, borrowers have been known to obtain a mortgage of £20 million with a deposit of just 35%.

The larger the deposit you can put down, the lower your rate will be offered. It’s best to discuss your overall financial situation with a broker who specialises in high-value mortgages, as they can guide you on the optimum deposit value to suit your immediate needs and long-term financial goals.

The criteria for assessing affordability will vary depending on the provider. A large mortgage is not out of the question if you have a complex income structure consisting of overseas investments, dividends, bonuses, commissions, offshore structures, SPVs, trusts, etc. However, you will need to find a lender that will accept your circumstances.

How a broker can help

Mortgages worth £5 million and above are far more dependent on individual circumstances than strict criteria. In many cases, the relationship between broker and lender is the determining factor in getting a mortgage approved.

Even the largest lenders in this market have small teams to deal with HNW mortgages, so an experienced broker will have an extensive network of associates to approach. As these mortgage products are almost entirely negotiable, having a broker on your side is crucial.

A broker’s market knowledge and working relationship with lenders will provide a cutting edge you would not have as an individual trying to negotiate the best deal. In some cases, they can even arrange offset mortgages too.

Specialist lenders who tailor their mortgage products to your needs are also flexible with the interest rates they offer. The first step to negotiating the best rate is being matched with a broker who has a record of securing great deals for borrowers in your situation.

If you get in touch, we can arrange for an HNW advisor we work with to contact you immediately.

Typical rates and repayment amounts

Many high street banks now have private arms and can now offer their own bespoke suite of lending. This has increased the variety of deals available and the competition for wealthy clients.

That makes the chances of being approved for a loan of £5 million or above greater but identifying the right lender for you somewhat more difficult.

As such, with the right broker negotiating on your behalf, you can benefit from some of the lowest-ever rates and best deals for large mortgages.

Typical monthly payments

Monthly repayments vary depending on the deal you are able to secure. A £5 million pound interest-only mortgage will generally cost £18,750 per month based on an estimated interest rate of 4.5%.

Repayment terms at the same rate would be around:

Please note that the rate used in this table is purely for example purposes and may not be representative of the mortgage interest rates available at the time you apply.

How to apply for a mortgage of £5 million or more

Follow these steps to give your application the best chance of success:

Step 1. Prepare your documents:

You will need all the usual mortgage application documents, such as proof of ID, address and income.

At this stage, it is best to get together the details of your entire wealth portfolio as you don’t yet know which assets and income streams will be agreeable to different lenders, and you want to keep all options open.

Step 2. Speak to a broker:

The additional complexities of high-value mortgages compared with standard mortgage applications make it necessary to speak to a broker before doing anything else.

After an initial consultation, you will be better-informed and more equipped to make the right decisions.

Should high-net-worth individuals buy property outright or take out a mortgage?

Even if you have sufficient cash to buy a multi-million-pound property, it can often be more beneficial to take out a mortgage. Repayment and interest-only mortgages are available at low rates, so carrying debt doesn’t need to be expensive.

And your savings retain liquidity for:

• Helping family members get on the property ladder
• Investment opportunities
• Unexpected expenses
• Buying a holiday home

A mortgage can free up some of the equity for other investments if you own a property worth more than £5 million outright.

There can also be tax advantages to putting your wealth into property.

High-value mortgages are also available for asset-rich people with a low basic income that large bonuses or commissions supplement. In these circumstances, your broker may recommend taking out a private mortgage. A broker can advise on whether your assets are sufficient collateral and whether borrowing against them is wise.

Get matched with a broker who specialises in large mortgages

High-value mortgage lending is a complex and specialist market. Many top providers have no customer-facing presence and only deal with brokers.

We work with mortgage brokers who have extensive knowledge and industry experience. They will guide you through your application, negotiate the best deal and simplify the process.

Call today on 0330 822 0505 or enquire online to arrange a no-obligation chat.