Large Mortgage Loans
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Straightforward mortgage advice from expert brokers. Finding the perfect mortgage just for you without the jargon.
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Large Mortgage Loans
Adam Messer talks us through large mortgage loans and what’s involved in higher level borrowing.
What is the biggest mortgage loan I can get?
I’m not sure there is a specific maximum loan – all lenders have their own criteria. Some will have maximum loans that are lower than others. There will always be a lender for any scenario.
I’ve just done a quick search, and rates are available if I wanted to borrow £10 million, although I personally couldn’t, unfortunately. We’re well into the multiple millions of pounds before we need to worry about maximum loans. The limiting factor will be your deposit or equity amount as the loan value goes up.
Who’s eligible for a large mortgage loan? Do many lenders offer large loans?
Anyone can get a large mortgage loan – you don’t have to be a certain type of person. The larger the mortgage loan gets, the more you’re going to need to earn, for a residential mortgage at least.
This will be different on an investment or a Buy to Let, by the way, or if you’re taking a bridging loan or development finance. There are other pages on the website for those.
For a residential mortgage, it’s all about your income. Your earnings could be simple and straightforward, or more complex. You could own a company and be paid from multiple different sources.
We can use all sorts of different income, including investments. There are lots of things lenders will take into account. The more specialist we get, the smaller the choice of lenders.
Most mortgage lenders will lend at least a few million pounds. There’s a good range of high street lenders for amounts up to multiple millions. More specialist lenders have minimum loan sizes of £1 million, so there are definitely lenders in this area of the market.
How can I get a large mortgage loan? Are they more difficult to get?
You can only borrow a large mortgage loan If you’ve got the income to support your application. If you don’t earn enough, then yes, it would be difficult to get a large loan.
Each lender has their own criteria. So if you’ve got the income and the deposit, you can get a large loan.
Let’s talk about deposit. If you’re borrowing a million or so, you’re going to need at least a 15% deposit. You might just scrape through with 10%, but the rate’s going to be higher and there’s going to be very little choice.
The more you borrow, the more deposit you’re going to need. Looking on the system now, if we want to borrow £10 million there are a couple of lenders we can go to with less than 40% deposit. We will need at least 30% deposit there.
But if we have 40% or more deposit, more lenders will come up. So one of the main criteria is deposit. There are too many different lenders to list them all with their deposit requirements.
If you’ve got a smaller deposit we just have less choice of lenders. We just need to check you meet those lenders’ criteria.
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What criteria do you need to meet for a large mortgage loan?
Deposit really is the key thing. The more you borrow, the more deposit you will need. We’re going to talk about different types of income in a moment, but obviously the income needed to support a large loan will be more than the income needed to support a smaller one.
Can you get a large loan if you are self-employed or a limited company director?
In my experience, when we’re dealing with larger mortgages of a few million pounds, most customers are self-employed or company directors. We do get people who are employed and earn a few hundred thousand a year, with bonuses and commissions.
There’s more information on mortgages for company owners on the website, but we can use different types of income. A company owner usually pays themself a tiny salary and everything else is dividends. We can use your dividends, but we can also use company profits.
Some lenders will even use your gross profits before tax, which can make a massive difference to the amount you can borrow. If you leave money in your business, we can use that profit to get a mortgage, rather than just the dividends.
If you can live comfortably on a small salary and dividends each year, but your company makes much more money, we can use that for the mortgage. Some lenders also factor in pension payments, because normally a pension is a tax deductible company expense. That’s not counted in your net profit, and some lenders will add that back in.
There are lots of things you can use if you’re a company director to get a large mortgage loan. Each case is very individual but company directors tend to have more options than anyone else.
Can you get a large loan with bad credit?
Yes, potentially. Just like any other mortgage, it really depends how bad your credit is. Again we’ve got a section on the website for bad credit mortgages. But the worse your credit history is, the harder it’s going to be.
If you’ve got a few missed or late payments here and there, that’s probably not going to cause us too many issues. But if you’ve been bankrupt in the last couple of years, that will be a big headache. If you’re somewhere in between, there’s probably an option for you.
You might pay for it, though. The more specialist you get with lending, the higher the rate is going to be.
How can a mortgage broker help if somebody is looking at a large mortgage loan?
For this kind of case, you can’t just compare the meerkat, see who’s got the best rate and then expect them to suddenly lend you £5 million. You might be outside of their criteria. Your income might be outside of their appetite.
A mortgage broker will know – especially one that’s used to dealing with large mortgages. We know which lenders to go to depending on your situation, your income, your credit score, your property and your equity. We will save you having to spend time looking around.
The chances are if you earn enough to borrow a few million pounds, you’re quite a busy person. So it’s much easier to hand all the hard work off to an expert to do this on your behalf.
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