Figures from estate agent Hamptons show that 7% of first-time buyers spent more than £500,000 on their home in 2020, rising to 15% in the south, and 33% in London.
As property prices rise to record levels, it’s perhaps no surprise that more and more people are seeking larger loans. However, if you have ever searched for a large mortgage – typically £1 million or more – you will know that it can be tricky.
Many lenders simply don’t offer large loans, and those that can often don’t have the underwriting capability to consider non-traditional sources of income – for example, investment income, foreign currency income, bonuses, pensions or retained profits.
Other lenders impose loan-to-value caps, so won’t lend more than 60% to 75% of the property value, irrespective of your circumstances. Furthermore, many “best buy” deals are not available for large loans.
To help you get the large mortgage you need, we have produced a comprehensive guide to large mortgages. Download your free copy now to find out why it’s important to work with an expert with the right expertise and contacts if you’re looking for a large mortgage.
In the meantime, here are three key things you should know if you need a large loan.
1. You need someone who understands how to get a large mortgage
According to the most recent figures published by Which?, lenders granted almost 3,800 mortgages of £1 million or more in 2018.
While large loans are becoming more common, it’s unlikely the mortgage adviser at your estate agent or local bank branch has experience of the complexities of dealing with a large mortgage.
They probably won’t have the underwriting expertise to tackle a case if your income is from non-traditional sources or you need a higher loan-to-value.
So, working with an expert who knows how to secure a large mortgage is key. For example, we know how to present your income and expenditure to a lender. We know which lenders are good at helping certain types of client. We also know how to obtain the most competitive rates for large loans.
If you needed legal assistance with a specific area of law, you’d call a solicitor with expertise in that field. So, if you need a larger mortgage, talk to an expert who deals with that type of client.
2. Work with someone who has access to a wide range of lenders
If you need a mortgage of £1 million or more, it’s vital to find someone who has access to a wide range of lenders.
When you work with us to find a large loan, we’ll typically consider three types of lender, in this order.
Mainstream lender
Finding a mainstream lender that can agree the large mortgage you need is typically the best outcome. You’ll benefit from highly competitive rates and low, flat fees, which can be as low as £1,000 even on larger loans.
While a mainstream lender is a great option, you need access to a broker with the right knowledge and experience, and contacts within these lenders.
Typical clients include:
- Partner of a law firm buying a new family home, seeking a loan of £2 million for a purchase at £2.5 million.
- Technology CEO remortgaging their home for £1 million against a valuation of £1.8 million.
- Husband and wife family business owners, remortgaging their home and a buy-to-let investment for total debt of £1.6 million against properties valued at £3 million.
Private bank
Private banks are an important component of the large loan market, offering far more flexible criteria than mainstream lenders.
They can often agree a higher loan-to-value than a mainstream lender, consider an interest-only structure and agree highly competitive rates, particularly if you can place assets under management (AUM) with the bank.
Crucially, private banks work with a select group of brokers. This is, again, why it’s so important to work with us, as only a small number of professionals have access to these lenders.
Typical clients include:
- Investment banking executive remortgaging their London home and a holiday home for total debt of £3.2 million against total property value of £5 million.
- Foreign national entrepreneur buying a new family home to relocate to London and needing a mortgage of £2.5 million to buy a property for £4.5 million.
- Property investor remortgaging an investment property with a £2.7 million loan against a property valued at £4 million.
Specialist lender
If your large loan requirement is really out of the ordinary, then we have access to a range of specialist lenders that can help. These include challenger banks, smaller building societies with niche lending specialisms and other finance companies.
For example, if you are seeking buy-to-let, bridging, or other specialist finance then we have a suite of lenders we have access to that can assist.
Typical clients include:
- A lawyer seeking £800,000 to buy a “house of multiple occupation” worth £1.4 million.
- A company director seeking £1.5 million in staged payments to build a new home, which will be worth £3 million when completed.
- Overseas investors refinancing a portfolio of properties for £2 million against a combined valuation of £4 million.
Whatever your requirements, get in touch with us and we’ll find a lender who can assist. Our large mortgage guide also contains lots more useful information about the types of lender we can approach on your behalf.
3. Find someone with all the right contacts
We help many clients with £1 million mortgages because we work closely with underwriters at some of the UK’s largest lenders and private banks.
This individual approach means we can discuss your case in detail with someone empowered to make a lending decision. It means we can help you obtain the lending you need if:
- You’re a partner in a professional services firm
- You’re a business owner or entrepreneur who draws income through dividends or salary, or you retain profits in your business
- Your income comes partly or wholly from foreign sources or is in foreign currency
- You’re a foreign national
- You receive part of your income in bonuses or shares, especially if these are overseas.
This bespoke approach to underwriting means we can help obtain funding tailored to your needs. We can also help you to obtain preferential terms, with lenders happy to tailor flexible and exclusive rates to your specific needs.
The key point here is that to work with an expert who has a network of contacts, so they know who to approach and who is likely to offer the most appropriate terms to you, based on your specific circumstances.
Get in touch
Download our large mortgage guide now for lots of useful help and tips for securing the finance you need.
If you’re looking for a £1 million (or more) loan and you’d like advice, please get in touch. Email [email protected] or call us on +44 (0) 20 3411 0079.
Please note
Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.
