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By Pete Mugleston | Mortgage Advisor

Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 28th October 2020*

The number of properties valued in excess of one million pounds continues to increase across the country. As a result, one million pound mortgages (and above) are not nearly as rare as they once were. Traditionally the domain of private banks, today, more and more high street lenders are able to provide this level of borrowing.

Looking for a mortgage on a property worth over £1 million? We can help by introducing you to one of the experts we work with – they have strong relationships with lenders across the market and regularly help many people arrange finance for higher value properties.

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Can you get a £1 million mortgage?

Yes, assuming you meet the lender’s affordability and eligibility requirements for this type of lending.

It often comes down to the choice between the high street bank and a lesser-known private bank.

Due to their financial flexibility, private banks tend to make up a larger share of the million-pound mortgage market, but high street lenders are becoming increasingly open to lending on higher value properties – they shouldn’t be ruled out.

Both have their pros and cons, outlined below.

The benefits of using a conventional lender for a £1 million mortgage

Many customers opt for a high street lender because…

They’re easier to access

Many private banks require an introduction, or impose other exclusive criteria that you’ll have to fulfil before they even talk to you. Not so with high street banks, who are much more open.

And just because they’re easier to get into, doesn’t mean that they’re less competent. Some high-street lenders have their own specialist teams that only deal with large mortgage loans.

They’re often more straightforward

The ‘rigidity’ of the traditional lender can also be seen as its strength.

The mortgage application process is often easy to understand and their acceptance criteria is quite transparent – which means that, provided you complete your application thoroughly, and you fit the criteria – you’re likely to get approval.

There may be fewer fees to pay

The level of service might not be quite as high as a private bank, but this can very often save you money.

They can require less commitment

Many private banks are not interested in working with you on a one-off basis. Instead, they often want to establish longer-term relationships, putting your ‘assets under management’ (AUM) and taking over your day to day banking/current account needs.

In contrast, a high-street lender will often require much less of a commitment to move the deal forward.

The benefits of using a private bank

Reasons to go private for a £1 million mortgage include…

A more flexible affordability criteria

The reason why private banks have traditionally dominated the high-value mortgage space is their ability to be more flexible in their acceptance criteria.

Private banks are often more willing to take risks, and will look more holistically at your assets, not just your income. They’ll factor in things like shares, bonuses and a variety of assets that a regular lender may not. There are also private lenders who offer mortgages based on pension income.

This means that, if you have unusual income streams, are self-employed or hoping to get UK mortgage based on foreign income, they may be a better option than a high street bank.

They usually offer more financing options

The flexibility of the private bank often extends to the kind of terms it offers. You’re more likely to obtain an interest-only mortgage, or a higher loan to value (LTV) ratio.

They often specialise in mortgages for £1 million and over

The premium you pay is reflected in the service you receive. Aside from giving you a more ‘tailored’ customer experience, niche private banks can be more efficient when it comes to pushing the deal through. After all, it’s what they specialise in.

How much income is required to qualify?

This really depends on whether you choose a high street lender or go private.

A conventional lender will usually base its affordability calculations on your salaried income (up to 4.5 times your income in most instances, going up to 6 times in rare cases). Some will consider a percentage of your annual bonus (but rarely the whole bonus).

They’ll also factor in your fixed expenses, which can involve everything from childcare to gym memberships – this is a process known as ‘stress-testing’.

That said, some high street lenders impose income caps on higher value loans. As an example, many of them won’t lend beyond 75-80% LTV above £1,000,000 – regardless of your income and any other factors.

Note: The FCA has now placed regulation on lenders to have no more than 15% of their new lending over 4.5x income, and so some lenders have taken action to restrict all loans over £500k under this level.

A private lender can be much more flexible. They’ll likely consider your application on a case-by-case basis – looking at your salaried income on top of your yearly bonus, and any other income streams you may have, such as rental income from a buy-to-let mortgage or your pension.

Some of them will even consider assets such as cars or luxury items as collateral against the loan.

If you’d like to know more about the level of earnings needed to qualify for a £1,000,000 mortgage, give us a call on 0808 189 2301 or make an enquiry and we can arrange for one of the advisors we work with to provide you with more information.

How much would a one million pound mortgage cost per month??

This, of course, depends on the kind of arrangement you make. A mortgage on £1 million could be taken on a  repayment or interest-only basis, and could range from a few to 35 years.

The table below provides a series of examples of how various timeframes and interest rates can affect your monthly repayments.

£1 million mortgage monthly payments
Interest Rate 3% 4% 5%
5 Years £17,968 £18,415 £18,873
10 Years £9,655 £10,123 £10,608
15 Years £6,905 £7,395 £7,910
20 Years £5,545 £6,058 £6,602
25 Years £4,741 £5,276 £5,848
Interest Only £2,499 £3,330 £4,170

The above is for illustration purposes only and you should consult a broker or lender for the most up-to-date information and rates.

Like with smaller loans, your perceived risk profile will also be a major factor in your monthly payments – as it can affect the loan to value (LTV) that the lender is willing to offer.

Things that can affect your risk profile include your credit history (and any credit problems you might have), the size of your deposit and the kind of property that you’re looking to buy.

The table below outlines various LTVs as they relate to your perceived risk. As with above, this table is for illustrative purposes only and you should consult a  broker or lender for the most up-to-date information and rates.

Property Value of £1,000,000
Your Risk Profile LTV Band Deposit Required Mortgage Amount
Lower Risk 95% £50,000 £950,000
90% £100,000 £900,000
85% £150,000 £850,000
80% £200,000 £800,000
Medium Risk 75% £250,000 £750,000
70% £300,000 £700,000
65% £350,000 £650,000
60% £400,000 £600,000
55% £450,000 £550,000
Higher Risk 50% £500,000 £500,000

If you’d like to receive some more information on how much the repayments could be on a £1 million mortgage, give us a call on 0808 189 2301 or make an enquiry and we can arrange for one of the advisors we work with to provide you with specific quotes, based on your own financial profile.

How to get a £1 million mortgage

Of course, without knowing your specific circumstances, it’s impossible to say exactly how straightforward getting a million pound mortgage could be. However, such high levels of borrowing are no longer restricted to the ‘jet-set’, and may not be as difficult as you think.

The best way to get a mortgage for £1 million is to apply through a specialist broker who arranges deals worth this amount and more on a regular basis.

A broker with experience arranging mortgages of this size could save time, money and potential disappointment. They’ll be able to scour the entire market (both high-street and private) to find the best deal for your unique circumstances.

What are the advantages of working with million pound mortgage brokers?

There are a number of reasons why you’d want to use a specialist broker, most especially at this level of financing.

Here are just a few reasons to choose a broker.

They’ll handle most of the red tape for you

Your mortgage broker can handle the vast majority of the not-inconsiderable admin involved in your mortgage application, such as filling in paperwork and chasing up providers.

It can increase your options

Whole-of-market brokers, like the experts we work with, have access to all of the products on the market, including specialist products and the ones that are not offered to the general public.

As such, if there’s a perfect product for you, you are much more likely to access it through your broker.

They’ll be transparent and working with a broker will provide regulatory protection

Brokers are bound by law to offer a product that is suitable and affordable for you. If this later turns out not to be the case you can claim compensation from the FCA or the Ombudsman.

This is where we can help. Get in touch and we can arrange for one of the advisors we work with to provide the assistance you need to work your way through this process.

Can I get a £1,000,000 mortgage for a  buy-to-let (BTL) property?

One million pound buy-to-let mortgages are out there, but the terms can be different.

As a general rule, lenders view buy-to-let as higher risk, and will expect you to put down a larger deposit. 25% deposit is fairly standard, though some of them will go down to 15% if circumstances are right. A private bank might be more flexible.

Minimum income requirements can also be a factor, especially with high street lenders. Many mainstream lenders won’t offer a BTL mortgage to anyone who earns less than £25k – though some of them will decide based upon the projected rental yields, with 125-130% of the mortgage payments being the general minimum.

Some private lenders will decide by factoring in additional income. For example, it may be possible to get a mortgage with bonus income factored in, or perhaps capital from property, savings or pensions.

A great many buy-to-let mortgages are interest-only, so keep reading to see what an interest-only mortgage on £1,000,000 might look like.

Can I get a one million pound interest-only mortgage?

Interest-only mortgages of this size do exist, and are subject to similar restrictions that you’ll find on smaller interest-only mortgages. You’re more likely to find interest-only mortgages offered by a private lender, though you shouldn’t rule out the high street completely.

As a general rule, you’ll need a slightly larger deposit – most lenders will only go up to 75% loan to value (LTV), though a small number will consider 80% or 85% in the right circumstances.

Remember: Some high street lenders impose LTV caps on high-value loans that supersede everything else. For example, they won’t lend above 75% on £1 million, regardless of any other factors.

The main benefit of an interest-only mortgage is the lower monthly repayments. This is, of course, evened out by the fact that the entire balance is due at the end of the term of the mortgage.

Your lender will want you to demonstrate a viable repayment strategy – basically, they want to see that you’ll be able to pay off the large principal payment at the end of it.

The table below shows how a repayment mortgage and an interest-only mortgage on one million pounds compare.

Both are at 4% interest.

Length of Mortgage Repayment Mortgage Monthly Interest-Only Mortgage Monthly
5 Years £18,415 £3,330
10 Years £10,123
15 Years £7,395
20 Years £6,058
25 Years £5,276
30 Years £4,772
35 Years £4,425

Where can I find a million pound mortgage calculator?

An online calculator can only give you the roughest approximation, but if that’s what you’re after, we have a selection of mortgage calculators you can try out.

Your best option is to get some friendly advice from one of the expert brokers we work with.

When it comes to getting a mortgage, there’s a huge number of variables – your deposit size, credit history and income sources being just a few of them.

Million pound mortgage FAQ

Below we’ve answered some commonly asked questions around million pound mortgages. Got a question that we’ve not answered here? Get in touch, and one of the experts we work with should be able to help.

Can I get a 1 million pound commercial mortgage?

Due to the valuations involved in commercial property, commercial mortgages of one million pounds and above are not uncommon today.

That’s not to say that it’s easy to get one, of course. If you’re interested in finding out more about commercial mortgages give us a call on 0808 189 2301 or make an enquiry and we can arrange for an expert to get in touch.

How much is the interest on a 1 million mortgage?

The interest on a £1,000,000 mortgage will depend largely upon the term of your product and the rate of interest you choose.

Below we’ve given a table that shows a range of interest rates and repayment periods

The cost of a million in mortgage interest over different terms
Interest Rate 1% 2% 3% 4% 5%
5 Years £17,092 £17,528 £17,968 £18,415 £18,873
10 Years £8,758 £9,202 £9,655 £10,123 £10,608
15 Years £5,983 £6,436 £6,905 £7,395 £7,910
20 Years £4,597 £5,060 £5,545 £6,058 £6,602
25 Years £3,767 £4,239 £4,741 £5,276 £5,848
30 Years £3,214 £3,697 £4,215 £4,772 £5,370
35 Years £2,821 £3,313 £3,848 £4,425 £5,049
Interest Only £830 £1,668 £2,499 £3,330 £4,170

How do I get the best million pound mortgage rates?

The same provisos apply to million pound mortgage rates as with any other lender. Basically, you want to find the product with the lowest rate of interest and the shortest repayment period.

This largely comes down to:

  1. Finding the lender with the best value product for you
  2. Being deemed a low enough risk to qualify for such a product

Things that lenders like include a strong credit history, a sizeable deposit and a high, stable salary.

If you get in touch we can arrange for one of the advisors we work with to help you find the best mortgage rates to suit your own specific requirements.

Can I get a £1 million 30 year mortgage?

Yes, it’s possible. At the time of writing, a number of lenders offer a 30-year mortgage on £1 million.

The table below shows how much you’d be looking to repay on a £1 million, 30-year mortgage. This is based on a repayment mortgage using a range of interest rates.

Interest Rate 1% 2% 3% 4% 5%
Monthly Payment £3,214 £3,697 £4,215 £4,772 £5,370
Total Repayments £1,158,150 £1,331,907 £1,518,474 £1,718,865 £1,934,359

Speak to a mortgage expert

As you can see from the details here, getting a million pound mortgage works in very similar ways to any other amount. It’s really a case of finding the right lender who can offer the best terms that match with your requirements (and you with theirs).

This is where we can help. The advisors we work with can offer the expert knowledge and advice you need, tailored to your own circumstances. Call us on 0808 189 2301 or make an enquiry to get started.

Updated: 28th October 2020
OnlineMortgageAdvisor 2020 ©

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs. Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.