If you have been seeking to secure a large mortgage (one in excess
of a million pounds) then 2013 has been a year when you were likely to
find a bigger choice of deals than at any time since the start of the
economic slump. More and more mainstream banks and other lenders have
been targeting the high value mortgage market and the choice of million
pound mortgages in the UK is increasing.
Some well-known lending institutions are now
considering lending over 1 million when previously their limit was
perhaps half of this amount. However, many mortgage brokers have urged
high net worth mortgage clients to take professional advice before
approaching a high street lender directly because many of them do not
have the underwriting experience to handle very large mortgages and
complex financial arrangements.
Santander, Investec and Scottish
Widows have launched large home load products aimed particularly at
professionals, who are likely to have well-mapped out career paths.Other
well-known lenders said to be considering million pound mortgages
include the Woolwich, HSBC, NatWest, Nationwide and Halifax.
During recent years many mainstream lenders withdrew their large home
loan offerings and the smaller private banks stepped in to fill the gap
and offer high value mortgages. However, as house-buying activity in the
prime UK property market continues to increase, more banks and building
societies have begun to offer larger loans again. Some are offering
two-year fixed rate deals at under 2 per cent for loans up to 5 million
but these are likely to be available only for those with straightforward
financial affairs and not for those with complicated income
arrangements.
Lenders tend to charge higher arrangement fees for loans in excess of 1
million but if that comes associated with a very competitive interest
rate then it is often worth paying when factored in to the lifetime cost
of the mortgage. Private banks, with their willingness to consider less
than straightforward arrangements with regard to income and ownership,
are still likely to be the best option for wealthy borrowers with
complex affairs. There rates are not significantly higher than the
mainstream lenders and private banks bring added expertise and
flexibility to the arrangement as well as specialist underwriters used
to dealing with high net worth finance clients. High street lenders
without this experience to properly assess a complex financial situation
usually just do not approve the loan.
Some private banks may
require a borrower to transfer some assets under management to secure a
low rate, but this is often a small price to pay for the savings that
can be made on the monthly repayments of a million pound plus mortgage.
While many more lenders will now consider a high net worth mortgage
client than in the past 5 years, many simply do not have the
underwriting expertise to agree a deal for borrowers with complex income
streams according tothe London mortgage adviser Enness Private Clients.
Most high street banks will only consider million pound mortgage deals
for clients with very straightforward income and assets. Consequently,
most high value mortgage borrowers will still be better served by
speaking to a broker who can approach a lender who they know understands
their particular situation.