Million Pound Mortgage
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Mortgages For Professionals with complex incomes through the main high street lenders
High street lenders typically provide more appealing rates, making them the preferred choice for many professionals seeking mortgage solutions. However, navigating the complexities of professional incomes can present challenges in securing loans from these lenders.
Professionals often assume they must seek alternative lenders due to the intricacies of their income streams. Yet, armed with a deep understanding of various payment structures, we confidently facilitate successful mortgage applications with high street lenders.
In fact, a substantial 93.4% of our mortgage applications are seamlessly processed through reputable high street lenders, showcasing our expertise in navigating complex income scenarios.
Million Pound Mortgage
Brian Keane is back to answer some frequently asked questions about million pound mortgages.
What is a million pound mortgage and how do I qualify for one?
This is probably the most straightforward answer I’ve ever given – a million pound mortgage is a mortgage for a million pounds or more. Qualifying for one is just like any other mortgage.
You just need to have an appropriate deposit level for the purchase price you’re looking at, and the appropriate earnings and ability to pay the mortgage back.
What types of million pound mortgages are borrowers taking?
Mostly on the bigger mortgages of £1 million plus, clients are asking for a larger element of flexibility.
They might choose an interest only mortgage, where there’s flexibility on the payment levels to suit irregular income, such as bonuses or shares vesting from previous share options.
What is the difference between a two-year and a five-year fixed-rate mortgage repayment on £1 million?
Interest rates change pretty much daily, but as we record this in November 2024, five-year fixed rates are slightly cheaper than two-year fixed rates. The difference in payments is fairly minimal.
It does change every day, in line with how the money markets view interest rates and how they are expected to move over the next two, three, four or five years. At the moment, five year fixed rates are slightly cheaper, but the level will always be subject to change.
What is the monthly payment on a million pound mortgage?
If a client wanted to cover interest each month on a million pound mortgage, as a very rough guide based on interest rates today in November 2024, an interest only payment is about £3,300 a month.
If you wanted to commit to a full capital and interest repayment mortgage, over 35 years, you would budget for around £4,400 a month. Those are very rough ballpark figures, for budgeting purposes as we sit here today.
Can I get an interest only million pound mortgage?
Yes, you can. Generally, when you get to a million pound borrowing level, lenders tend to ask for slightly bigger deposits, to take an element of risk out for them. But provided you’ve got at least 15% equity available, or a cash deposit to put into the purchase, you can secure an interest only mortgage for £1 million.
Can I get a million pound mortgage for a Buy to Let property?
Yes. The way Buy to Let mortgages are underwritten is generally on the back of the rental income level the property will generate, rather than personal income levels.
So on a million pound Buy to Let mortgage, lenders are looking at how much the property is worth and how much rental income it will generate on an assured shorthold tenancy basis.
Sometimes lenders will look at the personal income position over and above rental income, taking a more global view over a client’s circumstances.
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Can I get a million pound mortgage if I have bad credit?
It really depends how bad the credit position is. Poor credit does limit the options, but it will come down to the reasons behind it.
Lenders will ask how the poor credit built up and whether it is recent or historic. If you have a poor credit profile, it’s worth checking how bad it looks by getting a credit report from the credit reference agencies. Then, talk to a broker. Be open and straightforward with them so that they can present the case.
We will have an open and frank discussion with lenders so that nobody’s wasting anybody’s time. If the answer is going to be no, it’s always better to know that upfront rather than wait a month to get the same response.
How does the remortgaging process work on a million pound mortgage?
It’s exactly the same as on a mortgage of a smaller amount. You put an application into the lender and hopefully they’ll come back with a formal mortgage offer that you’re happy with.
Then, there will be legal work to move the mortgage from one lender to the new lender. Sometimes the new lender will cover the basic legal costs on moving the mortgage to them – sometimes they won’t. Some clients appoint their own solicitors to deal with the process more quickly.
There are no real differences for a mortgage above or below £1 million. If it’s significantly above a million, some mortgages have to be agreed at board level with the lenders, but that only slows the process up slightly. It’s just another hurdle to overcome.
What fees are there on a million pound mortgage?
Once you get above a million pounds, most mortgages have a slightly higher arrangement fee. Quite often on a remortgage or sometimes on a purchase, lenders provide a free basic valuation on the property.
On bigger value properties, generally £2 million upwards, lenders may not do that for free. They might charge a valuation fee to see what the property is worth.
Occasionally, though, on a million pound mortgage and upwards, lenders create a bespoke product specifically for that client and that particular mortgage. It’s rare, but it does happen, particularly on larger mortgages.
Do mortgage lenders accept income from commission and bonuses on a million pound mortgage?
Yes, but not always. If the bonus and commission is with the same company, they’ll generally look at the history of those for the last two years. They tend not to accept all of the bonus or commission income, and take a proportion of it.
There’s no set standard across the industry. Some lenders will take 40% of that figure, some 50%, some 60% and others slightly higher. If you’ve been in a particular industry and moving from one employer to another, a few lenders may accept just a one-year history. You would need a clear track record of working in that particular industry for a number of years.
Will mortgage lenders accept income paid in a foreign currency?
Some will, but the majority won’t. Those that do generally want that income to be in the major currencies, such as US dollars, euros, etc.
If it’s in a more volatile currency that fluctuates widely, such as the Indian rupee, then generally they will not accept that income. You can find out more on our foreign currency mortgage podcast [add link].
How can a mortgage broker help me with a million pound mortgage?
When you get to a million pound mortgage and upwards, it becomes more important to take specialist advice. You do need to talk to brokers that are used to dealing with million pound plus mortgages.
Most brokers tend to have an average mortgage size of about £150,000. They generally don’t tend to see that many million pound plus mortgages. So the key thing is to talk to a specialist firm such as Davidson Deem, who have good experience and background in dealing with these larger sums.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST BUY TO LET MORTGAGES.
