How To Get a £1 Million Mortgage

As house prices continue to rise year-on-year, so does the demand for mortgages of £1 million or more.

Whereas once they were rare commodities only handled by specialist private banks, they are now more widely available from regular high street lenders too.

But what is the criteria for securing a million pound-plus mortgage? Who can get them and do they work like every other mortgage?

This guide will take you through the details of what’s involved and shed light on big money borrowing.

Can you get a mortgage for £1 million or more?

The simple answer is yes. Many lenders are willing to offer up to, or above, £1 million to house buyers.

However, with significant sums of money involved, the more complicated answer is yes, but only if you meet the stringent set of criteria in affordability and eligibility that are necessary with high value mortgages.

Due to the complexity and pitfalls involved, many borrowers looking for large mortgages turn to brokers who specialise in this type of lending to boost their chances of success.

Where can you get one?

These days, both private banks and conventional high street lenders provide mortgages of £1 million and over, and also offer products to high net-worth customers who need to borrow significantly more than this.

Their approaches are very different, though, and both have advantages and disadvantages to consider.

It’s worth establishing which type of lender is best for you before you apply….

High street lenders

Many building societies and major banks provide £1 million mortgages, and some have a specialist team for such applications.

That said, some customers find that regulations are too rigid. For example, loan-to-value rates are capped – usually at about 70-85% – and most of the time these rules can’t be overridden, which can make securing these mortgages harder.

While some borrowers might find this impedes their application, some might like the fact that high street lenders’ straight-laced processes are easy to understand, easy to apply for and will undoubtedly cost less in fees.

A word of caution, though, you should always check the entire market before approaching a lender directly, as limiting yourself to just one range of products might mean you end up with an unfavourable deal.

Private mortgage providers

If it’s flexibility and bespoke options you’re looking for, this is where private lenders come into their own.

When it comes to high value lending, they are able to take more risks and judge each applicant on their unique set of financial circumstances as a whole. These tailored lending terms and pricing models are favoured above strict, immovable requirements.

This type of lending means your application will be assessed on a case-by-case basis, with a better chance of factors such as bonuses, shares and assets being taken into consideration, as well as if you have irregular income streams, if your income is from abroad, or if you’re self-employed.

While you will pay more in fees, you will receive a high calibre service with professionals who specialise in this area, which could also result in a more efficient process when it comes to getting a deal over the line. Securing a higher loan-to-value ratio or getting an interest-only mortgage might also be more feasible.

How to get a £1 million+ mortgage: Step by step

Here are the steps to follow to get a mortgage of £1 million or more…

Step 1: Prepare your documents

Firstly, make sure you do a thorough check that you have all of your official paperwork collected and in good order. You’ll need plenty of proof, certificates, statements and other documentation with the level of scrutiny that comes with a mortgage of this size.

You can find a full list of the documents you’ll need in our mortgage applications guide.

Step 2: Sharpen your credit reports

Your credit history still matters, even if you have a generous income that sufficiently covers the repayments. Remember, it’s all about risk for lenders, so getting approved and good interest rates depends on your credit score being the best it can be. Look into it and make sure it’s up-to-date with no mistakes.

You can download your credit reports in our guide.

Step 3: Speak to a mortgage broker:

Getting matched with the right broker who is experienced in large mortgages is crucial right from the beginning of the process. It will save you time, money and unnecessary stress.

We work with brokers who specialise in large mortgages, high net worth lending and private mortgages and can match you with your ideal advisor for the free, no-obligation chat today.

Eligibility criteria

Like with every mortgage application, your eligibility will come down to these main factors:

• Affordability: High street lenders will usually offer the same terms as every other mortgage. That is, lending of 4.5x your basic salary, reaching up to 5.5% in some cases. A few lenders might take a percentage of an annual bonus into consideration too, but not the full amount.
• Deposit: Most traditional lenders will have a capped loan-to-value restriction once they reach £1 million, such as 75-80%, so at least a 20% deposit is necessary. However, if your credit rating is strong, you could be granted just a 5-10% deposit percentage. The higher your deposit, the better rate of interest you will get.
• Credit history: As well as counting for whether you’re eligible in the first place, your credit report will also define your monthly repayments too. This is down to the degree of risk that might be assumed by a lender. If you have bad credit, there’s a chance you might need to find a specialist lender
• Property type: How ‘regular’ your home that you’re seeking a mortgage on is taken into consideration. The more ‘irregular’, the more risky lenders will deem it as it could be more costly to insure and harder to sell on.

What if you have high net worth exemption?

If you qualify for high net worth exemption – i.e. if you have an annual income of at least £300,000 or assets worth £3 million or more – the right mortgage lender will be able to offer you a bespoke deal where the usual lending criteria doesn’t apply.

This means that you could borrow more than £1 million under the following circumstances…

• Based on income multiples of 7 times salary or more
• Bespoke rates and terms negotiated from scratch
• With more discretion and privacy
• Mortgages secured against assets, such as a stocks and shares portfolio

One thing to keep in mind, though, is that you will need a private mortgage lender to get a bespoke high net worth mortgage deal, and these lenders are usually only accessible through a specialist broker.

How much your monthly repayments could be

Here is a hypothetical example of how much monthly repayments would be if the interest rate was 4% and the term length was 25 years. If any of these variables change, so will the monthly sum:

Mortgage (25 years)	Interest rate	Repayment mortgage – monthly figure	Interest-only mortgage – monthly figure
£1 million	4%	£5,276	£3,330
£1.5 million	4%	£7,914	£4,995
£2 million	4%	£10,552	£6,660

Interest-only mortgages on £1+ million properties

Some lenders will offer high value interest-only mortgages, but they will be harder to secure and lending options might be as low as 50% loan-to-value, although some will go up to 70-80%.

While these mortgages have lower monthly repayments, you’re not paying any capital from the loan, so you will be expected to prove a viable strategy for repayment when the balance is due at the end of the term.

Buy-to-let mortgages on £1+ million properties

Large buy-to-let mortgages are considered higher risk and in most circumstances you will need a larger deposit than is standard, with 25% being the average benchmark.

As with residential mortgages, applicants will be vetted for affordability and income, but rental yields may also be taken into consideration – 125-130% is generally the minimum – and private lenders could be swayed by your financial profile, assets, and incomes from salary, pensions, bonuses or capital.

Get matched with a broker who specialises in £1 million mortgages

The brokers we work with specialise in million pound mortgages, high net worth lending and private mortgages.

They know this section of the market inside out and they help our customers to get where they need to be without fuss, unnecessary costs and with the most competitive deals that they qualify for.

They have access to the entire market – including private lenders who aren’t usually accessible to the general public – and know the right places to look for our clients.

Get in touch with us today on 0808 189 0463 or make an enquiry and we’ll set up a free, no-obligation chat between you and your ideal broker today.