Getting a £2 Million Mortgage

To get a large mortgage of £2 million you would typically need a deposit of at least 20%, however, some lenders will accept a 10% deposit. You’re also likely to need an income of at least £300,000 to be approved.

At the time of writing (July 2024) the approximate monthly repayments on a £2 million mortgage are £11,692. 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 £3,507,540 over the mortgage term.

Traditionally the domain of private banks, today, more and more high street lenders can provide 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 £2 million pound mortgage cost?

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 £2 million mortgage?

Most lenders will focus heavily on your income with the amount you can borrow based on your salary. Lenders look at how much you earn and apply a multiple of that figure to determine your affordability for a £2 million house mortgage.

Within these parameters, each lender will apply their own specific criteria when assessing affordability.

For example, one lender may conclude that they will loan 4.5 times an applicant’s income whereas another may be more generous and offer loans up to 5 times.

A handful of mortgage providers will consider offering loans as high as 6 x earnings, although this would only be in exceptional circumstances.

This means that whether you’re looking for a 30-year mortgage on a £2 million or even a £2.4- £2.5 million property, the total sum you can borrow could vary significantly.

If your current income is in excess of £300,000 the table below gives you an idea of the maximum you may be able to borrow.

The above is for indicative purposes only and you should always check with your lender or one of the advisors we work with for the most up-to-date information.

If you were to apply for a £2 million mortgage, you may need an annual salary of £450,000 based on 4.5x income.

This could allow you to apply for a mortgage of £2,025,000, although if your lender allows you to borrow 5x your salary, your income would need to be £400,000.

Lenders may also wish to look at your income versus your outgoings, to determine whether you can afford the mortgage repayments on a two million pound mortgage as well as any other expenses or debts you may have. A mortgage advisor can calculate this on your behalf before you apply.

Knowing the amount of mortgage you can afford before applying can reduce the chances of a mortgage rejection. 

How your income type might affect your application

It’s most often the case that individuals who earn enough to afford a £2,000,000 mortgage have complex income arrangements in order to be more tax efficient.

It’s always recommended to have one of the expert brokers we work with go through your income as every lender has their own rules around income types so you could find two different lenders willing to offer you vastly different amounts.

How much deposit do you need for a £2 million mortgage?

Most lenders’ minimum deposit requirements range from 20% of the property value. However, some lenders will only require a deposit of 10%, while others will want a deposit higher than 20% to secure a £2 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 £2,000,000 – regardless of your income and any other factors – which means you’d need a deposit of at least 20% to qualify for the finance you need.

That said, it may be possible to find a £2 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 5-10%.

How to get a £2 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 £2 million mortgage, you will need to save a minimum deposit of 20% to 25%. The exact amount required will depend on the property value. For example, for a £2,000,000 house, a 20% deposit would be £400,000. 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 £2 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 £2 million mortgage

The table below shows how monthly payments on a £2 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 £2 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 £10,000, 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.

Getting a £2 million commercial mortgage

Commercial mortgages for this amount are available, although you will be subject to the lender’s criteria. You should also think about the type of commercial mortgage you require as there are two types.

Owner-occupier mortgages are used to buy property that will serve as a trading premise while commercial investment mortgages are typically used to invest in commercial property (often to let out for a profit).

Your eligibility for a £2 million commercial mortgage will depend largely on your own financial circumstances although lenders will also want to know the purpose of your business, any debts associated with the business, your outgoings, and how many employees you have.

All of this information will help a provider build a picture of how much you can afford to pay in monthly repayments for a commercial mortgage.

Get matched with the right mortgage broker

Still unsure about how to get a mortgage for £2 million? That’s understandable! High-net-worth mortgages can be confusing, especially if you have never applied for one before.

But the good news is that we work with brokers who specialise in large mortgage amounts, high net worth customers and private lenders.

Speaking to the right advisor before you apply could save you time and money in the long run, and we can introduce you to your ideal broker for free.

We offer a complimentary broker-matching service that will quickly assess your needs and circumstances to pair you with the advisor who’s best positioned to get you a great deal on a £2 million mortgage.

Call us today on 0808 189 2301 or make an enquiry to get started today.