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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: 22nd October 2020*

You used to have to track down a private bank to find a multi-million pound mortgage. Not so today – as inflation pushes up home prices, more and more high street lenders are moving into the high-value mortgage space.

But that’s not to say that private banks aren’t still a great option for some. In this article, you’ll learn about mortgage loans over 1 million, how they work, and what it takes to get one.

We have more people than you might imagine asking us about £1,000,000 mortgages, some who have been turned down or may have bad credit history.

Talk to us. The experts we work with have plenty of experience helping people like you to get the financing they need – at every level, even on million-plus mortgages.

Here’s what you’ll learn in this article

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Can I get a mortgage for over £1 million?

Yes – assuming you earn enough to satisfy the lender’s affordability requirements and meet their eligibility criteria.

With mortgages of this size, the choice often comes down to the high-street or a private bank.

Private banks have traditionally dominated the large mortgage space – they tend to be more flexible and less risk-averse than the typical high street lender.

That said, over the last few years, more and more high street lenders have started to offer large loans – which comes with its own pros and cons.

Why use a high street lender?

The positives and negatives of both types of lender are outlined below….

It’s often more straightforward

The tick-box criteria used by traditional lenders is arguably more transparent than the ‘case-by-case’ approach taken by private lenders.

As such, the mortgage application process is often easier to understand, and the acceptance criteria more transparent. This means that if you fit the criteria and fill out the paperwork correctly, you’re more likely to get approval without any surprises.

There’s less commitment

Private banks aren’t known for providing a one-off service and then parting ways.
Instead, they tend to prefer longer-term relationships in a system that is sometimes referred to as ‘assets under management’ (AUM). A high street lender can be far more transactional or requires far less to get the deal done.

They’re easier to get access to

There’s a reason why private banks are associated with exclusivity and secrecy – they have traditionally imposed certain criteria that limit who can work with them (such as an introduction from the right person, or a minimum annual income).

You’re unlikely to face this with high-street lenders, who are much more inclusive.

Note: Another thing worth remembering is that ‘easy access’ doesn’t necessarily mean that a high-street lender is less competent. A number of high-street firms have specialist, in-house teams that deal exclusively with high-value loans.

It may be cheaper

Some would say that ‘you get what you pay for’, whereas others would argue that the level of extra service doesn’t justify the often higher fees imposed by a private bank.

Why use a private bank?

Reasons to go private include…

They may offer more options

Private banks are often more flexible when it comes to the terms of your prospective mortgage. Examples include lower loan to value (LTV) ratios or interest-only terms

They’re often the specialists

Many private banks have spent decades, if not centuries, focusing almost exclusively on the high-value mortgage market, which is in contrast to many high street lenders, who tend to offer ‘a bit of everything’. You may get a more efficient service because of this.

They’ll be more understanding if your income is ‘complex’

Flexibility and a greater appetite for risk means that private lenders are far more open to financing you.

This is why private banking is relatively popular amongst people with unusual income streams (such as rental income from a buy-to-let mortgage or bonuses) as well as customers who are looking for a UK mortgage based on foreign currency). This is in contrast to a high-street lender – who’ll mainly focus on your salaried income.

What income do I need for a home mortgage over 1 million?

A big factor is whether you choose the high street or private route.

Conventional lenders mainly base their affordability calculations on your annual salaried income. In most instances, this is up to 4.5 times, though some of them will go up to 5 or 6 times, if the other criteria check out.

Some will consider mortgage applications with bonus income or commissions factored in – but may only consider a percentage of these sources, while others will let you declare 100%.

Your committed expenses will be factored in too – in a process referred to as ‘stress-testing’. This is calculation lenders use to check the impact of future interest rate rises, to ensure the mortgage will still be affordable. It can cover everything from your gym membership to your childcare costs – the more expensive your living situation, the bigger the risk.

‘Hard’ income caps

Some lenders (usually high street) impose income caps, regardless of your income or other factors. For example – many won’t lend above 75-80% on £1 million, regardless of your circumstances.

Note: The Financial Conduct Authority (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.

Private lenders are often much more flexible

Like a high street lender, they’ll look at your income, but they won’t follow the same ‘check box’ type process. Instead, they’ll treat your application as a unique case, factoring in other income streams such as bonuses or property. It could also be possible to find a lender who offers large mortgages based on pension income.

If you have significantly valuable luxury assets (such as high-end cars, boats and so on), some lenders will consider these as collateral against your loan.

What are the typical monthly interest payments on a mortgage over £1 million?

Below we’ve given a range of monthly payments from £1 to £1.5 million, but at 4%.

Monthly payments on various mortgages at 4%
Mortgage Value£1m£1.1m£1.2m£1.3m£1.4m£1.5m
5 Years£18,415£20,256£22,098£23,939£25,781£27,622
10 Years£10,123£11,135£12,147£13,159£14,172£15,184
15 Years£7,395£8,134£8,874£9,613£10,353£11,092
20 Years£6,058£6,663£7,269£7,875£8,481£9,087
25 Years£5,276£5,804£6,331£6,859£7,387£7,914
30 Years£4,772£5,249£5,726£6,203£6,681£7,158
35 Years£4,425£4,868£5,310£5,753£6,195£6,638
Interest Only£3,330£3,663£3,996£4,329£4,662£4,995

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

As a further example, a 30 year mortgage on 1.2 million will cost you £1,432 a month less than a mortgage with the same term on 1.5 million. And how much is a mortgage on 1.4 million? About £2,111 a month more for 25 years than a mortgage for £1 million.

As with six or five-figure mortgages, the kind of repayment terms (such as LTV and interest rate) will be largely determined by how risky a lender deems you to be.

What affects my risk profile?

The main things that affect your risk profile are…

  • The kind of property you’re looking to buy (i.e. how it is constructed and where it is located)
  • The size of your deposit (the bigger your deposit, the lower the rate in most cases)
  • Your credit history (including any bad credit history, past or present)
  • Your age (some lenders might be apprehensive if the mortgage term runs into your retirement years)

Examples of bad credit mortgages include:

The below table outlines various LTVs as they relate to your perceived risk.

As with above, this table is demonstrative purposes only and you should consult your broker or lender for the most up-to-date information and rates.

Property Value of £1,300,000
Your Risk ProfileLTV BandMortgage AmountDeposit Required
Lower Risk95%£1,235,000£65,000
90%£1,170,000£130,000
85%£1,105,000£195,000
80%£1,040,000£260,000
Medium Risk75%£975,000£325,000
70%£910,000£390,000
65%£845,000£455,000
60%£780,000£520,000
55%£715,000£585,000
Higher Risk50%£650,000£650,000

Can I get a mortgage over a million for buy to let?

Yes, a number of specialist lenders cater to larger buy to let loans – something that’s more common in the commercial space. As with all buy to let mortgages, the rules are a little different.

Lenders see buy to let as higher risk. As such, they’ll offer lower LTVs and 25% deposits are not uncommon – though some will go down to 15%, subject to other factors being right. As with many things, private lenders may be a little more flexible in this area.

Some will lend based on your rental yield projections – usually looking at 125-130% of the monthly mortgage payment as the minimum.

Private lenders may also factor income sources in – such as your annual bonus, pension, savings, income from property, and so on.

Many buy to let mortgages are on an interest only basis – below you’ll be able to get an idea about interest only mortgages at this scale.

Can I get a multi million interest only mortgage?

Seven figure interest only mortgages exist, but, like their six and five-figure equivalents, they’re a bit more restrictive than repayment mortgages.

For a start, you’re more likely to find this kind of mortgage at this size through a private lender, though the high-street might be able to offer a few alternatives.

As a general rule, you’ll need a larger deposit. Most lenders will cap out at 75% LTV, though you may be able to get some to consider up to 85% in the right circumstances.

Don’t forget: some lenders impose LTV caps which will overrule other factors. As an example, many won’t lend above 75% LTV on £1 million or over.

Many people choose interest-interest-only mortgages for the lower monthly repayments. The flipside, of course, is that the entire balance is due at the end of the mortgage’s term.

As such, your lender will want to see a viable repayment strategy – they want to be sure that you’ll be able to make that large final payment. This doesn’t apply to buy to let mortgages though – as they are for investment purposes, most lenders are happy with ‘sale of property’ as the repayment strategy.

The below table shows how a repayment mortgage and an interest-only mortgage on £1.2 million compares.

Both are at 4% interest.

1.2 Million Pound Mortgage
Mortgage TermRepayment Mortgage MonthlyInterest Only Mortgage Monthly
5 Years£22,098£4,000
10 Years£12,147
15 Years£8,874
20 Years£7,269
25 Years£6,331
30 Years£5,726
35 Years£5,310

Why is it particularly important to get professional advice when getting a mortgage over a million?

When the stakes are this high, professional advice can pay for itself many, many times over. Professional mortgage advisors are particularly common in the high six/seven-figure mortgage space – and dealing with a broker who specialises in this kind of financing has plenty of advantages.

It can be more straightforward, cheaper and faster

A great broker can find the right lender – helping you to close the deal in as straightforward a way as possible. They can also spare you the not-insubstantial extra work that comes with a mortgage application, and ensure that your applications are completed properly, first time around. This maximises your chance of getting approved.

You could get better terms and better access

A professional whole of market broker has a network of connections that spans high-value teams at the biggest lenders to major players on the private banking scene.

All of this means more choice – and more options. A great broker can help you find products with more flexible term lengths, higher LTV ratios and lower interest rates.

Reassurance from working with the best

We all know that buying a house or refinancing isn’t exactly a walk in the park. But we also know that choosing a great broker provides peace of mind that the best people are working for you to get the deal done.

How do I get access to a private bank?

Every bank tends to have its own criteria and approach to taking on new clients.

Some may impose a limit based on minimum annual income or net assets – but private banks are often more flexible than people think. After all, they’re in the business of financing people, and they need to take on new clients.

Where can I find a million-pound mortgage calculator?

When you factor in the many variables that come into play when getting your financing together, a mortgage calculator can only give you the very roughest idea.

If that’s what you’re after, take a look at the online mortgage calculators we have on our site.

You have to factor in your unique circumstances – things such as your credit history, deposit size and sources of income. For a clearer idea, speak to one of the expert advisors we work with.

Get the access, expertise and funding you need

Call Online Mortgage Advisor today on 0808 189 2301 or make an enquiry online.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances. We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.

Updated: 22nd 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.