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Large Mortgage Loans
Whilst smaller mortgages are easier to obtain compared to large mortgages, this is not due to income or affordability, but generally, lenders will limit how much they will lend.
High street lenders will generally only lend a maximum of 1 million. Specialist lenders will have more room to wiggle on how much they lend, and this could go up to 2 million. You will also require a 40% deposit to unlock higher value mortgages.
How do I get a large mortgage?
Lenders will cap how much they lend to minimise the risk to them, if you were to get 1 million which is spread across 4 people, that is £250K each, it’s a lot less than lending 1 million to a single individual, this is due to the fact capital is spread which in return means the risk is reduced.
If one of the borrowers’ defaults, the lender will risk losing £250K as opposed to the lender risking losing 1 million on a single individual.
If you need a high value mortgage, you should aim for these factors:
- Make sure you have good credit
- Clear debts
- Show as much income as you possibly can
- You should aim for a 40% deposit.
Your application will need to be almost perfect, especially is the mortgage you are applying for totals over 1 million. It’s highly recommended you speak to a specialist broker so reach out to Pinnacle today and speak with one of our specialist brokers who can advise you on the best steps.
Let’s discuss your mortgage options!
Do I need a larger deposit?
You are able to apply for a large mortgage with a smaller deposit than 40%. Lenders will generally prefer the deposit to be larger as the risk is a lot less compared to a smaller deposit. If there became a situation where the lender would need to recover the funds, it’s less to recover in addition to the property which should cover the loan amount.
Overall, larger deposits for mortgages of this value are highly preferred by the lender. Generally, this is also the case for any mortgage, despite its value.
How much can I borrow?
As all mortgages, affordability plays a massive factor when a mortgage is assessed by a lender. Having a large mortgage will have large repayments to make, so a lender needs to be sure these payments are affordable and will be made.
Your affordability will be based on your current income as well as expenditures and outstanding loans you may have. Lenders need to make sure that you are financially capable of making payments on a commitment of this size.
Lenders on a typical mortgage will lend up to 4-5 times your annual gross salary. For self-employed individuals, it will typically be made on 4-5 times your net profit and directors’ dividends.
If you are a high net worth individual and require a large mortgage, specialist lenders may lend more than 4-5 times your annual income, it could go as high as 7 times your annual income.
If you’re looking for a large mortgage, speak to one of Pinnacle’ brokers today, we have access to whole market lenders to help find you the best deal possible.