Large Mortgage Loans for High Value Properties

You can use our comparison tool to look at mortgages currently on the market in the UK, however it’s worth noting that not all specialist mortgage lenders publish their rates. Therefore, we recommend you speak to an adviser for a more accurate picture of the mortgage deals and rates available.

These are indicative figures only and may not represent all the costs associated with each product. For more information speak to one of our mortgage brokers on 0330 433 2927.

A large mortgage loan typically refers to a larger than average amount of money borrowed to finance the purchase of a property. The specific threshold of a large mortgage loan can vary, but it’s usually a loan of at least £750,000 - £2 million or more. This is because you’ll typically have to be a higher or additional rate taxpayer in order to be eligible. These larger mortgages are often used to purchase high value properties in more expensive areas. Due to the increased risk for lenders, large mortgage loans can mean larger deposits, higher interest rates and entail stricter eligibility criteria.

Some of the common types of large mortgage loans include the following:

• Repayment mortgage - a common homebuyer mortgage, you make regular payments towards the outstanding loan balance as well as interest payments. You’ll typically need at least 10% in deposit but will have access to a wider range of large loan repayment mortgage products if you can provide at least 15% in deposit
• Interest-only mortgages - you only make regular interest payments and the outstanding loan capital is paid off via a repayment vehicle such as selling the property at the end of the mortgage term. To be eligible for a large loan interest-only mortgage, lenders will often require a minimum income of £75,000 as well as at least 25% in deposit. Interest-only mortgages typically have higher deposit requirements because if the borrower intends to use the sale of the property as a repayment vehicle, the lender will want to make sure there’s at least a minimum amount of equity in the property
• Fixed rate mortgages - these offer a stable interest rate for a specified period, such as 2, 5 or 10 years, providing predictable monthly payments and making budgeting simpler
• Vairable rate mortgages - these interest rates can go up and down in line with the Base Rate or lender’s SVR (standard variable rate). Common variable rate mortgages include trackers which move in line with the Base Rate and discounted rates which are set at a certain amount below the lender’s SVR
• Offset mortgages - offsets allow you to deduct your savings from the outstanding loan balance so that you only pay interest on the difference. Offsets can be particularly useful for high earners with substantial amounts of savings they may want access to at some point, and so don’t to use the full amount as a deposit which will then be tied up in a property
• Part-repayment part-interest-only - part and part mortgages allow you to reduce your monthly payments by having some of the mortgage be interest-only, while still building up equity in the property. They offer more flexibility and freedom to use income for investments rather than having most of your income being tied up in making repayments. Many higher earners choose to put the difference between their current repayments on a part and part and what their repayments would have been on a fully repayment mortgage into investments. This allows them to make money they can use as a repayment vehicle, rather than relying on the sale of the property

When considering a large mortgage loan, you need to think about your circumstances, appetite for risk and financial goals. Consulting an independent mortgage broker like John Charcol can help you choose the right type of large mortgage loan for your needs.

Most high street lenders in the UK offer mortgages of up to £5 million with a handful stretching to £10 million. Typically, the maximum LTV (loan-to-value) for a large loan is 85%.

Borrowers will often use high net worth mortgage brokers like John Charcol because we understand complex and unique situations and we can source bespoke deals from the right lenders. We handle everything for you - so you can spend your time on more important things.

Minimum Deposit for a Big Mortgage

The minimum deposit for a large mortgage is 15%.

John Charcol can also find lenders that will consider loans secured against some forms of existing assets that aren't property.

Interest Rate Range for Large Loans

Average interest rates for larger mortgages via mainstream large loan lenders tend to be from 3.5% (March 2023). There are options with specialist large loan lenders like private banks but these can sometimes be more expensive as they're often bespoke and depend on the borrower's unique situation.

AUM and Dry Lending

There are 2 ways in which a large mortgage lender might offer you a mortgage; both have benefits and downsides which you’ll need to consider and discuss with your mortgage adviser:

• AUM (assets under management) - this is a common scenario with private bank mortgages. Under this arrangement, the lender will want to manage other assets for you - such as your stocks and shares portfolio. These assets provide the lender with greater security and often result in them offering a higher LTV or a larger income multiple than would have otherwise been achieved
• Dry Lending – this arrangement works in the same way as a traditional mortgage. It’s where the lender takes security over the property they’re lending against without taking security over any other assets which you may already have

Large Mortgage Loan Payments

Due to the bespoke nature of large mortgage loans, it’s sometimes possible to structure the monthly mortgage payments in a way that better suits your personal circumstances. For example, this may involve an annual rather than monthly mortgage payment to coincide with annual bonus payments.

Your mortgage broker will discuss these options with you and work with the lender to find the solution that best meets your needs.

Large mortgage loans are assessed the same way as smaller mortgages. Your lender will assess your creditworthiness, including your credit score, and ensure you can afford the mortgage loan. They’ll look at your employment history, property valuation, your age and loan term, debts and outgoings, etc.

The main difference with qualifying for a large mortgage is that the lender will likely have higher income requirements in order to ensure you can afford the mortgage and a larger minimum deposit requirement to negate risk. 

It’s also worth noting that if you want to borrow more than £5 million and/or have a variety of income sources such as investments, then you may want to consider a specialist lender who can look at lending more and take alternative income sources into account when assessing your application. To access these lenders you’ll likely need a mortgage broker such as John Charcol who can help you find a lender that will allow you to borrow more and give you the best deal.

Although the requirements can be stricter and you may have bespoke needs, ultimately, if you have a good credit history and meet the lender’s criteria, the mortgage process itself won’t be any different whether you’re applying for a £200,000 or £1 million mortgage.