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A Guide to Large Mortgage Loans

No impact on credit score

Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: August 5, 2021

When refinancing or buying high-end property, many customers struggle to find the large mortgage loans required for various reasons. It may be based on affordability, income, or loan to value (LTV) criteria, but is more often than not because most mortgage lenders place limitations on how much they’ll offer one individual.

The good news: If you’ve been turned down it’s important to remember that every lender is different. Where one lender says no it leaves a gap in the market for another to take the risk. With the right advice and enough income, it’s possible to get a multi-million-pound mortgage, and this guide will tell you how to go about it and how to get the advice you need.

What is classed as a large mortgage?

This will vary from one mortgage lender to the next, but most experts would agree that a ‘large’ mortgage is one that’s worth one million pounds or more. Specialist advice is highly recommended if you’re borrowing this amount as not all mortgage providers are in a position to offer a mortgage of this size, even if you can comfortably afford the repayments.

For million pound or multi-million-pound mortgages, the lenders who are best placed to approve an application aren’t necessarily the big names you’ll find on the high street. Customers who are in the market for large mortgages often find the most favourable rates and deals through private lenders, specialist mortgage providers and lenders who are only approachable through a broker.

The good news is that we work with brokers who specialise in large mortgages and they have deep working relationships with the lenders that offer them. With their help and impartial advice, you can rest assured that you’ll be matched with the right lender first time, and this could mean saving time, money and potential marks on your credit report in the long run.

Are they more difficult to get?

If you meet the affordability criteria for a large mortgage, they are only more difficult to get in the sense that fewer mortgage lenders offer them. Some mortgage providers place a cap on the maximum mortgage amount they can offer under any circumstances, and people in the market for a multi-million pound property often fall afoul of these restrictions.

The best way to avoid these lender caps is to speak to a mortgage broker who specialises in large mortgages and high net worth borrowers. They understand the needs of such customers and know exactly which lenders to approach depending on the amount they need to borrow.

Approaching a lender directly and being declined due to their maximum loan cap can leave marks on your credit report and jeopardise future requests for finance, but with the help of the right broker, you can avoid this pitfall and find the right mortgage provider first time.

How to get a large mortgage

Large mortgages are assessed in exactly the same way as smaller mortgage loans. The lender will need to assess your creditworthiness and make sure you can afford the amount you’re borrowing. If you have enough income and deposit, the process isn’t really any different if the mortgage amount is £2 million or £200,000. You can read about what the mortgage application process entails in our standalone guide and read about mortgage eligibility here.

Although the steps in the mortgage process are no different for extra large loans, it’s especially important to seek professional advice first. Due to there being fewer lenders available for deals worth over a certain amount, the chances of being declined or having to settle for unfavourable rates are higher than they’d be for a mortgage worth a few hundred thousand.

Speaking to a mortgage broker who helps high net worth individuals get finance every day is the logical place to start as they can offer you bespoke advice about your options, guide you through the application process and make sure you find the ideal lender.

Large mortgages with high loan to value ratios

Most lenders will cap their mortgages at different levels depending on the loan to value ratio (LTV) and how much deposit or equity you have. It is usually tiered so that lower deposit (higher risk) applications are subject to more stringent limitations, where higher deposit (lower risk) are free to borrow far greater amounts.

For example, one lender may cap the amount you can borrow at £500,000 for 90% LTV applications, £800,000 at 80%, and a maximum of £1 million at 75% or below. Depending on your circumstances, there are lenders willing to consider large mortgages up to and exceeding £2 million, even at higher loan to values. But keep in mind that your best chance of finding a lender this flexible is through a broker who specialises in large mortgages.

Affordability criteria

When considering large mortgages, affordability can be key. Of course, a lender will need to establish what you can feasibly borrow based on your income, and be confident you’ll be able to meet repayments throughout the life of the loan.

If the income is acceptable, most mainstream mortgage deals are usually limited to 4.5x or 5x annual income for employees, net profit for sole traders and partnerships, and salary plus dividends for limited company directors. However, some lenders are prepared to expand this for high earners looking for bigger borrowings and can consider discretionary income stretches for affluent clients, allowing a higher mortgage amount, in some instances up to x6 income.

For example purposes, you can find out what the monthly payments and interest might be on mortgages worth up to £1 million over in our mortgage calculators section.

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Large mortgages for directors of limited companies

Directors of limited companies can often find it difficult to find a lender for large mortgages, as many only consider income based on earned salary and dividends. This can cause issues when directors choose to leave cash in the business and not draw it out as personal income, but have still earned a healthy net profit. The majority of lenders will ignore net profit in this way, which can really restrict successful business owners who’s accountants have drawn their books up in a way that penalises them, despite being completely creditworthy.

Thankfully, there are certain more specialist lenders with different income criteria, that assess a directors income based on salary and share of net profit. This means that if funds are earned but left in the business, they can still be used in the borrowing assessment, and this could make all the difference if you’re looking for a large mortgage and will only qualify for the amount you need with all available income factored into the lender’s assessment.

Get matched with a broker who specialises in large mortgages

The main takeaway from this article is that your chances of being approved for a large mortgage will be much higher if you apply through the right mortgage broker.

Finding the right mortgage broker can be the hard part since everyone’s needs are different and high net worth deals are a niche area of lending. But the good news is that we can find the

Ideal broker for you, and you won’t have to lift a finger while we do it.

We offer a free broker-matching service that will quickly assess your needs and circumstances to pair you up with an advisor who specialises in large mortgages and high net worth customers. Call 0808 189 2301 or make an enquiry online and we’ll set up a free, no-obligation chat between you and them today.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the 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.

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