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Million Pound Mortgage

Found the perfect property with a price tag of over a million pounds? Then this guide on million-pound mortgages is your ticket to bagging that dream home.
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So, you’ve settled on the ideal property at the best location and with a stunning view. But the price asked is over a million pounds!

This is not as uncommon as you might think. In today’s world of rising property prices, million-pound properties in the UK are very much in demand. High-net-worth individuals and celebrities are definitely among those looking at such properties.

Thankfully, lenders are also entering this space and no longer shy away from offering a million-pound mortgage. But with so many options around, how do you settle on the best one for your needs?

Don’t worry! This article will provide you with all the information you need to know about million-pound mortgages. So, let’s dive in without further delay!

Popularity Of Million Pound Mortgages

The UK, especially London, offers some of the world’s most prime real estate. These properties are always in demand, and in the UK, real estate has always been appreciated. So, it’s only natural that million-pound mortgages are growing in popularity.

In fact, million-pound mortgages are often used to buy properties in real estate “hot spots” such as central London. 

How To Qualify For A Million-Pound Mortgage 

The process of getting a million-pound mortgage is pretty much the same as that for any other mortgage amount. As long as you meet the lender’s criteria, you shouldn’t have any trouble getting the loan approved.

Your annual income will play a very important role here. In general, lenders expect you to earn about £200,000 a year to get a million-pound mortgage because of the required income multiples to lend such an amount. 

If you have a complicated income stream, including part-time earnings, bonuses, and foreign currency income, the process can be a bit more difficult. Some lenders don’t consider these as regular income and thus do not use them within affordability calculations.

Your spending habits also play an important role, as they will determine whether you’ll be able to pay back the loan.

Million-Pound Mortgage Rates

Interest rates for these mortgages usually vary from lender to lender, as does the deposit amount required. It can also depend on the property you’re looking at and your own unique financial situation.

Since the mortgage amount here is very large, lenders will usually assess your mortgage application thoroughly before making an offer. The more you borrow and the more complex your circumstances, the greater the rate (usually).

Presenting your case to the lender plays a vital role, as this will give lenders better context on your situation. 

At LendingLine, we can help you with that. We can connect you with expert mortgage advisors who can guide you and get your million-pound mortgages approved.

What Will Be My Monthly Repayments on A Million Pound Mortgage?

Your monthly repayment amount will depend on the following:

  • Your rate of interest offered
  • The mortgage term
  • The amount of deposit you’ve put in
Monthly Repayments on A Million Pound Mortgage

For example, a million pounds for a term of 25 years at 4.5% interest rates would require you to pay around £5,558 per month, provided the property value is £1,200,000, and you’ve put in a £200,000 deposit as an example.

Apart from the above costs, every lender will levy their own product fees on a product-by-product basis. 

Mortgage arrangement fees are often around £1,000 to £2,000; however, some lenders charge fees as a percentage of the total loan amount being applied for.

That means that for a mortgage of £1 million, the arrangement fee would come to around £20,000. In addition, there might also be valuation fees, which are about £1,500, and flat-rate booking fees. These fees will depend on the mortgage product being applied for. 

You’d also need to pay for stamp duty, which is a % of the property valuation and a significant cost to consider.

How To Get A Million Pound Buy-to-Let Mortgage

In a buy-to-let mortgage, lenders usually decide on the loan amount based on the potential rental income from the property. 

Typically, you’d need to cover around 145% of the monthly payments from the rental income. 

This means that for a buy-to-let mortgage, researching and deciding on the rental values of the market in which you’ve chosen to buy is crucial. 

Also, note that buy-to-let mortgages usually require a higher deposit amount, though the exact amount might be negotiable in some cases.

Is it possible to get an Interest-only million-pound mortgage?

Here at Lendingline, we’ve seen most buy-to-let borrowers opting for interest-only mortgages as these have lower monthly payments. 

This means more profit from the rental income. Interest-only variations of residential mortgages are also possible, but these are rarer.

At the end of an interest-only mortgage term, the full amount you’ve borrowed needs to be repaid. So, lenders will want proof that you’ll indeed be able to pay back the entire amount at the end of the term. 

For this, you might need to provide details of your investments and other properties so that you can raise the due amount.

How Can LendingLine Help?

As you’ve read so far, we can safely assume that you understand how complex the ecosystem for a million-pound mortgage can be. That’s why we recommend contacting our advisors at Lendingline.

At LendingLine, the expert advisors we partner with can guide you with the best plans, interest rates, and repayment terms. They also offer bespoke mortgage services that consider your unique needs and financial circumstances and ensure you’re getting the best possible deal.

Frequently Asked Questions (FAQs)

1. Do Mortgage Lenders Consider Foreign Currency Income?

Yes, lenders may accept foreign currency income for million-pound mortgages. However, they might adopt some special criteria to reduce their risks due to currency fluctuations. For instance, if you earn around 110,000 Euros per year, which is around £100,000 pounds, they’ll consider 80% of the income as your annual income to account for currency fluctuations. 

You don’t have to face this when you’re earning directly in pounds. Most global currencies, such as Dollars, Euros, and Dirhams, are eligible for mortgage considerations.

2. What Are The Repayment Terms For A Million Pound Mortgage?

Generally, most mortgages have terms running from five to 25 years, but since the amount involved here is so large, some lenders can agree to longer terms, such as 40 years or more. This will also depend heavily on the borrower’s age.

3. Can Gifted Funds Be Used To Put Down A Deposit For A Million Pound Mortgage?

Yes, some lenders might accept such funds as the deposit for a million-pound mortgage. They might require a letter from the person gifting you the money to confirm that this is indeed a gift and not a loan and require more detailed verification because the gift will typically be a larger amount. They may also request documents to verify the sources of the gifted funds.

4. Is It Possible To Make Overpayments On A Million Pound Mortgage?

Yes, it is possible to make overpayments on most million-pound mortgage products, provided your lender allows it. Overpayments can help reduce the overall interest you need to pay and the loan term. 

However, your lender may place certain limitations on the frequency of overpayments.

5. What Happens When You Can’t Pay Back A Million-Pound Mortgage?

If you can’t pay back a million-pound mortgage, you might face serious consequences, such as legal action and repossession of the property. If you’re facing financial difficulties, we recommend contacting your lender immediately to discuss options for restructuring or a potential payment holiday if acceptable.

Your home may be repossessed if you do not keep up repayments on your mortgage.

All content is written by qualified mortgage advisors to provide current, reliable and accurate mortgage information. The information on this website is not specific for each individual reader and therefore does not constitute financial advice.

I am a CeMAP (Certificate in Mortgage Advice and Practice) qualified mortgage adviser with a proven track record of successfully helping my clients achieve their property goals within the whole of the market. I personally specialise with clients who have a bad credit history (Defaults, CCJs, IVA etc), self-employed, first-time buyers & Buy To Lets.

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