High Net Worth Mortgages Made Simple
Straightforward mortgage advice from expert brokers. Finding the perfect mortgage just for you without the jargon.
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Straightforward mortgage advice from expert brokers. Finding the perfect mortgage just for you without the jargon.
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High Net Worth Mortgages Made Simple
Large mortgage loans
Whilst there is not generally any special criteria just because your mortgage is higher, generally speaking if you are a high net worth individual or have the income to borrow over a million pounds, your income is likely to be more complex than most. Here we explain how High Net Worth Mortgages are made simple for you.
What are High Net Worth Mortgages?
According to the Financial Conduct Authority, a “high net worth” client needs to earn over £300,000 per year or have net assets over £3m. However, in everyday terms you might class anyone that can afford to borrow over £1m as reasonably high net worth. Whilst there are not really any specific mortgages for loans over £1m, some lenders do look at things slightly differently as the amounts get higher, so it is important to understand the different criteria lenders have.
How do you get a million pound mortgage?
Securing any residential mortgage these days is all about your income and ensuring that your income is sufficient for the amount you want to borrow. We usually find that those with the income to support a large mortgage don’t tend to have simple employed income and nothing else. Often we see limited company directors using their retained profit, investment income, land and property income, the list goes on and can often be a combination of many different sources. So with this in mind these cases don’t tend to just fit in one box from a High Street lender. Luckily there is a good selection of lenders that will look at all of these things and allow us to put a case together for an application.
How much do you need to earn to borrow a million pounds?
This isn’t a straightforward answer really as it depends on your situation, your outgoings and commitments as well as the type of income we are using. But if you assume a simple calculation of 5 times your income then about £200,000 per year should do the trick.
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How much deposit do you need for a mortgage over a million?
It tends to work out that the more you are borrowing the more deposit you will need. At the moment It’s true to say that technically to borrow over a million pounds there are one or two lenders that may consider 10% deposit, but the options are very limited. Realistically you will need at least 15% deposit. As the loan amount goes up past £1.5m then this deposit figure will increase to 20% to give you a good choice of lenders. We should caveat this by saying that there may well be options with a little less deposit than this, but this information is to give you the biggest choice of lenders.
How much does a million pound mortgage cost?
Again, this will be very personal to your own individual circumstances. With larger and more complex loans it is not always as easy as just a straightforward repayment mortgage. There may be other factors to consider such as interest only or maybe an interest only part of the mortgage.
Can you have a large mortgage on interest only?
Potentially yes. You can generally have most mortgages either fully or partly on interest only as long as you have enough equity or deposit. For more information on interest only mortgages you can visit our dedicated page here. With the income you would need for a mortgage over £1m this will also open up the door to more options for interest only. Interest only mortgages certainly have their place in this instance. It is likely that high net worth clients will have other investments and opportunities that mean having some or all of their mortgage on interest only, and so reducing the monthly cost, will allow more flexibility.
Why should you use a broker to help you secure a large mortgage loan?
With lender’s criteria constantly evolving and affordability rules changing too, securing any mortgage yourself can be tricky let alone knowing you have the best one for your circumstances. Add in some complex income from different sources and a desire to have an interest only element and you certainly can’t just use a comparison website! Mortgage brokers tend to have access to lenders or criteria that you can’t access yourself and can compare the offerings from every lender that will be appropriate for you in one place. This means no time-consuming research for you and you will always know you have the very best solution for your situation.
For more information on High Net Worth Mortgages, please Contact Us today.
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