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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: 12th June 2020*

There are a number of lenders who may agree to a £2 million mortgage, but like with any large loan, there are often strict criteria to meet.

This makes it all the more important to ensure you understand mortgage affordability and have spoken to an expert before seeking approval for a two million pound mortgage. In fact, getting a mortgage for a property with a higher market value can be a lot easier once you know how lenders assess borrowers and how much they may be prepared to loan you.

To prepare you with the information you need to apply for a £2 million mortgage, we’ve created this handy guide which includes:

A property purchase is a huge financial decision and it can be financially beneficial to work with a mortgage broker who can source the best deal. Call us on 0808 189 2301 or make an enquiry and we’ll put you in touch with a mortgage broker who has experience with high-net-worth mortgages.

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How much does a two million pound mortgage cost?

The cost of a £2 million mortgage can vary significantly between lenders as each one will offer differing rates and terms based on your own financial and personal circumstances. For example, lenders will check your affordability based on factors such as credit history, income, and any existing debts. In addition to this, the amount you will pay on your monthly repayments will depend on:

This can make it difficult to predict the exact cost of a £2 million mortgage, but we’ve included the table below to give you an idea of possible mortgage repayment and interest rate cost.

What are the repayments on a £2 million mortgage?

The monthly payments below are based on a loan of £2 million and an interest rate of 3.5%.

Mortgage Term Repayment Mortgage Interest-Only Mortgage
15 Years £14,301 £5,839
20 Years £11,602
25 Years £10,016
30 Years £8,984
35 Years £8,270

The above is for indicative purposes only and you should always check with your lender or one of the advisors we work with for the most up-to-date information. For an accurate figure, make an enquiry and the experts we work with will crunch the numbers for you.

What income bracket is required for a £2 million mortgage?

The majority of lenders will focus heavily on your income, looking at how much you earn and applying a multiple of that figure to determine your affordability for a £2 million house mortgage. Within these parameters, each lender will apply their own specific criteria when assessing affordability. For example, one lender may conclude that they will loan 4.5 x an applicant’s income whereas another may be more generous and offer loans up to 5 x. In fact, there are even a handful of mortgage providers that will consider offering loans as high as 6 x earnings, although this would only be in exceptional circumstances. This means that whether you’re looking for a 30 year mortgage on a £2 million or even a £2.4- £2.5 million property, the total sum you can borrow could vary significantly. 

How does my income level affect mortgage affordability?

If your current income is in excess of £300,000 the table below gives you an idea of the maximum you may be able to borrow.

Total Earnings 4.5x Salary 5x Salary 6x Salary
£300,000 £1,350,000 £1,500,000 £1,800,000
£400,000 £1,800,000 £2,000,000 £2,400,000
£500,000 £2,250,000 £2,500,000 £3,000,000
£750,000 £3,375,000 £3,750,000 £4,500,000
£1,000,000 £4,500,000 £5,000,000 £6,000,000

The above is for indicative purposes only and you should always check with your lender or one of the advisors we work with for the most up-to-date information. Therefore, if you were to apply for a £2 million mortgage, you may need an annual salary of £450,000 based on 4.5x income. This could allow you to apply for a mortgage of £2,025,000, although if your lender allows you to borrow 5x your salary, then your income would need to be £400,000. Lenders may also wish to look at you income versus your outgoings, to determine whether you can afford the mortgage repayments on a two million pound mortgage as well as any other expenses or debts you may have. A mortgage advisor can calculate this on your behalf before you apply. Knowing the amount of mortgage that you can afford ahead of applying can reduce the chances of a mortgage rejection. 

Income Types

It’s most often the case that individuals who earn enough to afford a £2,000,000 mortgage have complex income arrangements in order to be more tax efficient. It’s always recommended to have one of the expert brokers we work with go through your income as every lender has their own rules around income types so you could find two different lenders could offer you vastly different amounts.

Should I use a calculator to work out mortgage repayments?

All too often, we hear of borrowers who have received incorrect quotes from online mortgage calculators. These can be helpful for quick quotes but they should never be used for accurate figures if you want accurate monthly payments for a £2 million mortgage. In fact, many £2 million mortgage calculators leave out crucial information which unfortunately leads to misinformation and inaccurate quotes. An expert can be particularly helpful if you’d like to calculate repayments for a more specific mortgage sum, such as £2.1 million – it can be tricky to accurately calculate these figures on your own. To gain true insight into how much your £2 million mortgage will cost, speak to a professional broker to find the best mortgage deal. Not only can this save you money on application fees and mortgage payments but it can also spare you the laborious task of comparing numerous mortgage deals.

What are additional costs for a £2 million mortgage?

In the excitement of applying for a mortgage, some borrowers can forget to include the various other costs that are associated with buying a property. A good tip is to include these costs when calculating your affordability for a £2 million mortgage. These may include:

  • Valuation fees
  • Solicitor fees
  • Arrangement fees
  • Booking fees
  • Insurance costs
  • Stamp duty

Can I get a £2 million commercial mortgage?

Yes, although you will be subject to lender’s criteria. You should also give thought into what type of commercial mortgage you require as there are two types. Owner-occupier mortgages are used to buy property that will serve as a trading premises while commercial investment mortgages are typically used to invest in commercial property (often to let out for a profit). Your eligibility for a £2 million commercial mortgage will depend largely on your own financial circumstances although lenders will also want to know the purpose of your business, any debts associated with the business, your outgoings, and how many employees you have. All of this information will help a provider build a picture of how much you can afford to pay in monthly repayments for a commercial mortgage.

Speak to an expert advisor today!

Still unsure about how to get a mortgage for £2 million? That’s understandable! High-net-worth mortgages can be confusing, especially if you have never applied for one before. The advisors we work with are on-hand to guide you through the process and are more than happy to answer any of your questions. To speak to an expert for the right advice, call us today on 0808 189 2301 or make an enquiry.

Updated: 12th June 2020
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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 info 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.