Million pound mortgage (A guide)
In this brief guide, we are going to discuss how to get a million pound mortgage.
Million pound mortgages may come across as very difficult to obtain to those who aren’t experienced on the matter and those who view million pound mortgages as some sort of psychological barrier.
Admittedly, a million pound mortgage is different from a mortgage below a million pounds but there are still various mortgage lenders who offer these mortgages and all have different ways of approaching them.
If you are looking to buy a home and the cost is above £1,000,000 the the good news is that there are million pound mortgage brokers as ourselves who may be able to help you obtain such a mortgage.
The million pound mortgage market requires some level of understanding of the different mortgage lender policies in lace and their attitude to credit risk. With the right million pound mortgage broker you may be able to borrow as much as 90% loan to value although you may find most mortgage lendrs requiring as much as a 40% mortgage deposit for a million pound mortgage.
Interest-only million pound mortgages are also becoming more attractive for those looking to get high loan to value rates if they can provide a suitable repayment vehicle and if the mortgage lender is willing to accept their personal circumstances.
When looking to get a million pound mortgage the mortgage broker must consider not just your income but also your asset base so they can best advise on how they can proposition your mortgage application to get the desired results.
What are the monthly repayments on a million pound mortgage?
Your monthly mortgage repayments on a million pound mortgage will differ based on your mortgage rate, the mortgage term, any other fees included in your mortgage such as your mortgage protection insurance etc.
The table below gives you a guide on what your monthly mortgage repayments on a million pound mortgage may look like based on a particular mortgage term and mortgage rate.
What are the interest repayments on a million-pound mortgage?
The total interest repayments on a million-pound mortgage will differ based on the term of the mortgage and the mortgage rate. The below table gives you an idea of what those repayments could look like based on the mortgage rate and the mortgage term.
|Mortgage rate||Mortgage term||Total interest charged|
What is the total cost of a million pound mortgage?
The total cost of a million pond mortgage will differ based on your mortgage rate, the type of mortgage( e.g interest-only vs repayment) and your mortgage term.
The below table gives you the amortization schedule of a million pound mortgage with a 4% fixed rate of interest over a 30-year mortgage term.
|Year||Beginning balance||Monthly payment||Total interest paid||Total principal paid||Total payed throught the year||Remaining balance|
Can you get an interest-only million pound mortgage?
Yes, you can get an interest-only million pound mortgage. At the time of writing, there are at least 30 mortgage lenders who are able to offer interest-only million pound mortgages.
An interest-only million pound mortgage may be suitable for you if you are looking to keep your monthly mortgage repayments low and if you have a suitable capital repayment vehicle to repay the total outstanding mortgage balance.
The interest-only million pound mortgage market cpuld be seen as competitive as it can be at this point based on the number of mortgage lenders entering it so the mortgage rates aren’t as bad as you may imagine.
Can you get a million pound mortgage from a high street bank?
Yes, you may be able to get a million pound mortgage from a high street bak as many high street mortgage lenders have now revised their maximum lending to beyond £1,000,000 due to the rising house prices in the UK.
High street mortgage lenders may lend up to £3 million but they tend to be less flexible than private banks and specialist mortgage lenders who are more willing to work on a case by case approach.
Most high street lenders will simply refuse you if you don’t meet the strict lending requirements they set.
Using a million pound mortgage broker may help avoid such an issue.
High street mortgage lenders will also have very strict caps on supplementary income and may not accept all of the supplementary income many borrowers may present. If you earn most of your income through bonus payments then you may fnd that most high street mortgage lenders may only accept a certain percentile of this which may greatly reduce your mortgage affordability.
High street mortgage lenders will also usually insist on a capital repayment basis for their million pound mortgages and this means you won’t have the flexibility of an interest-only mortgage, as well as having much higher monthly mortgage repayments to make.
On the other hand high street mortgage lenders ten to offer more favourable rates than private banks when it comes to million pound mortgages. This may not be true in every instance and hence you should seek independent financial advice before making a decision.
Getting a million pound mortgage from a private bank
Private banks are one of the first places most people think of when considering million pound mortgages.
The obvious benefits of private banks when considering million [ound mortgage is that they are much more flexible and are able to look one each mortgage application on a case by case basis.
This greatly increases the chances that you would be able to geta million pound mortgage from a private bank.
Any ordinary person can assess a private bank, you do not have to be super-rich to assess their services but you need to have a willingness to play ball. This means you need to be able to accept that the relationships formed with private banks will usually need to go beyond simply getting your million pound mortgage.
Most private banks will insist you place assets under management with them, although many will still lend to you even if you refuse to do this, it simply is a way to build a banking relationship and gain extra privileges.
Private banks will usually consider all your assets and your complete financial life and plans when lending to you and can be significantly flexible in comparison to a high street mortgage lender.
By placing your assets under management with the private bank, it will give them more certainty that you are more creditworthy rather than simply submitting documents proving asset ownership.
In many cases, placing assets under management with a private bank will give you access to better mortgage rates.
Private banks will also consider interest-only mortgages for your million pound mortgage and will consider up to 100% of your bonus payments when looking at your mortgage affordability.
Getting a million pound mortgage from a Niche building society
Niche building societies are another huge player in the million pound mortgage market. Niche building societies may lend as high as £3million to £5 million and are much more flexible than high street lenders.
If you are a first-time buyer then a niche building society may be right for you as they tend to focus on this type of buyers.
A lot of niche building societies have strong links in the areas where they were formed and contribute immensely to the local communities.
Thus could be attractive to you.
Million Pound Mortgage Rates
Million pound mortgage rates could change at any time so posting million pound mortgage rates here may not help you. What you should know is that the million pound mortgage rates on offer will differ based on the type of lender offering it and the mortgage case of the buyer.
High street lenders are known to offer the best million pound mortgage rates but you will need to tick every box on their lending criteria and usually, they will only lend as high as £2 million.
On the other hand, private banks and niche building societies will offer a much more personal approach but the mortgage rates tend to be higher.
What deposit do I need for a million pound mortgage?
The mortgage deposit requirement for million pound mortgages will differ from one mortgage lender to the other but you should expect to put as much as 40% down as a mortgage deposit and in any case you should look to reduce the amount you borrow as this reduces your loan to value rate and makes it more likely that the mortgage lender will offer you a mortgage.
That being said you can access 90% LTV million pound mortgages based on your personal circumstances.
What loan to value can private banks offer for million pound mortgages?
Private banks will usually look for a loan to value rate around 70% but they can go as high as 85% based on the borrower’s circumstances. E.g a lender may offer a 85% loan to value rate but only for borrowers who earn a minimum of £500,000 a year.
The lender may offer you a loan to value based on numerous factors including their view on the property market and in what direction house prices in the region you are buying from may move.
Use a million pound mortgage calculator
A million pound mortgage calculator will give you an idea of what the monthly mortgage repayments on a million pound mortgage may be but you should only use this for guidance.
FAQs: Million pound mortgage
Can you get a million pound mortgage?
Yes, you can get a million pound mortgage b8t this will be based on your circumstances as a borrower, the type of property you are trying to get, the type of mortgage you are trying to get e.g a buy to let mortgage and your repayment choice.
How much do you need to earn to buy a 1 million house?
The amount you will need to earn to buy a 1 million pound house will depend on the mortgage lender you are applying to. Different mortgage lenders have different mortgage lending criteria and in this space, the criteria tend to differ a lot.
What can a Million pound mortgage broker service offer you?
“Bespoke lending solutions from £1million
Large mortgage loans up to 95% LTV (Loan to value)
An uncomplicated approach to income & wealth
Solutions for HNW & UHNW individuals with no assets under management requirement
Offshore solutions for UK ex-pats, non-domiciled UK residents, UK residents earning in a foreign currency and foreign nationals
Large loan interest only mortgage options
Lombard lending from £2m
Mortgages for residential and investment properties
Mortgage finance for landed estates
Borrowing into retirement options (including interest only)
Options for short term finance (bridging), buy to let, commercial and development
Mortgage solutions for complex income arrangements e.g. onshore and offshore trusts and property held in offshore companies”
In this brief guide, we are going to discuss how to get a million pound mortgage.
If you have any questions or comments please let us know.
If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.