£1 Million Mortgages

To get a large mortgage of £1 million you would typically need a deposit of at least 10%, with some lenders requiring a deposit of 20%. You’re also likely to need an income of at least £200,000 to be approved.

At the time of writing (July 2024) the approximate monthly repayments on a £1 million mortgage are £5,846. This is based on current interest rates being around 5%, a typical mortgage term of 25 years, and opting for a capital repayment mortgage. Based on this, you would repay £1,753,770 over the mortgage term.

Traditionally the domain of private banks, today, more and more high street lenders offer this level of borrowing. For more information on what you can expect to pay, the income you’ll need and other factors that affect your monthly repayments, keep scrolling.

How much does a £1 million mortgage cost per month?

The amount you repay each month depends on your interest rate, mortgage term, and the type of mortgage you choose, such as a repayment or interest-only mortgage.

Securing a mortgage with a longer term typically results in smaller monthly repayments but you’re likely to pay more over the mortgage term.

It’s a good idea to speak to one of the advisors we work with to better understand what your repayments might look like. They can assist you in obtaining more favourable terms and lower repayments than what you might secure on your own when trying to get a mortgage.

How much do you need to earn to get a £1 million mortgage?

This depends on whether you choose a high-street lender or go private. The amount you can borrow is based on your salary. A conventional lender will usually base its affordability calculations on your salaried income (up to 4.5 times your income in most instances, going up to 6 times in rare cases).

Some will consider a percentage of your annual bonus (but rarely the whole bonus).

They’ll also factor in your fixed expenses, which can involve everything from childcare to gym memberships – a process known as ‘stress-testing’.

A private lender can be much more flexible. They’ll likely consider your application on a case-by-case basis – looking at your salaried income on top of your yearly bonus, and any other income streams you may have, such as rental income from a buy-to-let mortgage or your pension.

Some will even consider assets such as cars or luxury items as collateral against the loan.

How much deposit do you need for a £1 million mortgage?

Most lenders’ minimum deposit requirements range from 10% to 20% of the property value. So, you’ll likely need a deposit in this range to secure a £1 million mortgage.

Some high street lenders impose income caps on higher-value loans. As an example, many of them won’t lend beyond 75-80% loan-to-value above £1,000,000 – regardless of your income and any other factors – which means you’d need a deposit of at least 10% to qualify for the finance you need depending on the lender.

That said, it may be possible to find a £1 million mortgage with the same deposit requirements as a standard residential mortgage if your application is strong and there are minimal risk factors (such as bad credit) present.

Under these circumstances, you could theoretically secure a mortgage with a smaller deposit of 5%, but it’s uncommon.

How to get a £1 million mortgage

Once you’ve found a property and completed the necessary calculations, your next step should be to find an experienced mortgage broker. This will increase your chances of approval and help you secure the best available terms.

Using our free broker-matching service you can speak to the right broker straightaway by simply enquiring online.

They’ll be able to help with:

• Deposit requirements: To secure a £1 million mortgage, you will need to save a minimum deposit of 10% to 20%. The exact amount required will depend on the property value. For example, for a £1,000,000 house, a 10% deposit would be £100,000. One simple way to save for this deposit is to open a savings account and put 10% to 15% of your monthly wage into the account.
• Reviewing and Optimising Your Credit Reports: It’s important to check your credit history before applying to ensure no bad credit issues exist and remove any inaccurate or outdated information that could hinder your chances of securing the mortgage you need.
• Gathering all the necessary paperwork required for your application: Your broker will be able to guide you through the application process and all the typical documents required – proof of income, at least three months of bank statements, personal ID, proof of address, evidence of deposit, latest P60 form etc.
• Determining Your Borrowing Capacity: Based on typical lender salary multiplier calculations, you might assume that £1 million is the maximum amount you can borrow for a mortgage. However, this may not be the case. A mortgage broker can assess your circumstances and eligibility for better deals from lenders, potentially allowing you to borrow more at better interest rates.
• Identify the Right Lender and Secure the Best Deal: Your mortgage broker can identify lenders offering the best interest rate terms. This can save you time and potentially some money.
• Guiding you through the Mortgage Process: Getting a mortgage can be difficult, especially if it’s your first application. The right mortgage broker can help you with any issues you may face along the way, look after your interests and be a lifeline in case anything goes wrong.

Example monthly repayments for a £1 million mortgage

The table below shows how monthly payments on a £1 million mortgage can change depending on the rate and term.

Interest-only mortgages

Interest-only mortgages of this size do exist and are subject to similar restrictions that you’ll find on smaller interest-only mortgages.

You’re more likely to find interest-only mortgages offered by a private lender, though you shouldn’t rule out the high street completely.

As a general rule, you’ll need a slightly larger deposit – most lenders will only go up to 75% loan to value (LTV), though a small number will consider 80% or 85% in the right circumstances.

Remember: Some high street lenders impose LTV caps on high-value loans that supersede everything else. For example, they won’t lend above 75% on £1 million, regardless of any other factors.

The main benefit of an interest-only mortgage is the lower monthly repayments.

This is, of course, evened out by the fact that the entire balance is due at the end of the term of the mortgage.

Your lender will want you to demonstrate a viable repayment strategy – basically, they want to see that you’ll be able to pay off the large principal payment at the end of it.

The repayment amount for interest-only mortgages stays the same regardless of the loan term. For example, if the monthly repayment at a 6% interest rate is £5,000, it will remain the same whether you choose a 15-year or a 30-year term. This is due to the principal amount not decreasing and being paid off in full until the end using a separate repayment vehicle.

For the purpose of these tables, we assume the interest rate stays the same for the full length of the mortgage. Interest rates can change if you decide to remortgage on to a different rate or move from a fixed or discounted deal on to the lender’s standard variable rate (SVR).

With the Bank of England base rate currently at 5.25% (July 2024) and the average mortgage rates between 5% to 6% the repayment figures along these rows in the table above would be the most realistic at present. This can change as and when the base rate changes.

The benefits of using a private bank or specialist broker

While a broker can help you get a mortgage of this size, there are advantages to using a private bank instead.

1. A more flexible affordability criteria

Private banks have traditionally dominated the high-value mortgage space due to their ability to be more flexible in their acceptance criteria.

Private banks are often more willing to take risks and will take a more holistic look at your assets, not just your income. They’ll factor in things like shares, bonuses and a variety of assets that a regular lender may not.

Some private lenders offer mortgages based on pension income.

This means that, if you have unusual income streams, are self-employed or hoping to get UK mortgage based on foreign income, they may be a better option than a high street bank.

2. They usually offer more financing options

The flexibility of the private bank often extends to the kind of terms it offers. You’re more likely to obtain an interest-only mortgage, or a higher loan-to-value (LTV) ratio.

3. They often specialise in mortgages for £1 million and over

The premium you pay is reflected in the service you receive. Aside from giving you a more ‘tailored’ customer experience, niche private banks can be more efficient when it comes to pushing the deal through.

After all, it’s what they specialise in.

The benefits of using a conventional lender

Despite the willingness of private banks to provide mortgages of this amount, there are still reasons to use a conventional lender instead.

1. They’re easier to access

Many private banks require an introduction, or impose other exclusive criteria that you’ll have to fulfil before they even talk to you.

Not so with high street banks, who are much more open.

And just because they’re easier to get into, doesn’t mean that they’re less competent.

Some high-street lenders have their own specialist teams that only deal with large mortgage loans.

2. They’re often more straightforward

The ‘rigidity’ of the traditional lender can also be seen as its strength.

The mortgage application process is often easy to understand and their acceptance criteria is quite transparent – which means that, provided you complete your application thoroughly, and you fit the criteria – you’re likely to get approval.

3. There may be fewer fees to pay

The level of service might not be quite as high as a private bank, but this can very often save you money.

Buy-to-let mortgages

One million pound buy-to-let mortgages are out there, but the terms can be different.

As a general rule, lenders view buy-to-let as a higher risk and will expect you to put down a larger deposit. A 25% deposit is fairly standard, though some will go down to 15% if circumstances are right. A private bank might be more flexible.

Minimum income requirements can also be a factor, especially with high-street lenders.

Many mainstream lenders won’t offer a BTL mortgage to anyone earning less than £25k – though some will decide based upon the projected rental yields, with 125-130% of the mortgage payments being the general minimum.

Some private lenders will decide by factoring in additional income.

For example, it may be possible to get a mortgage with bonus income factored in, or perhaps capital from property, savings or pensions.

Many buy-to-let mortgages are interest-only, so keep reading to see what an interest-only mortgage on £1,000,000 might look like.

Get matched with a mortgage broker

There are brokers who specialise in arranging mortgages worth £1 million and more, and the best way to begin your application is by speaking to one of them about your options.

These brokers have the knowledge and experience you need to get the best deal available. For mortgages worth £1 million and up, there are specialist lenders who offer bespoke deals with much better terms than what’s available on the high street, but you often need a broker to access these mortgages.

We offer a free broker-matching service that will quickly assess your needs and circumstances to pair you with an advisor who specialises in £1 million mortgages. Call us on 0808 189 2301 or make an enquiry to get started today.