How much does a £2 million pound mortgage cost?
Page edited and updated 19/12/2024
How much does a £2 million pound mortgage cost?
If you are planning to purchase or remortgage a high-end property and require a £2 million mortgage, Trinity Financial has access to a range of lenders offering large mortgage loans.
Banks and building societies offer a selection of £2 million mortgages. At the time of writing this blog, fixed rates start from 4.07%. View our million-pound mortgage best buy table and borrowing calculators.
How much is a £2 million two-year fixed-rate mortgage?
One of the most competitively priced two-year fixes for £2 million mortgages is available through Santander for Intermediaries' large loan team priced at 4.21%.
Wealthier clients with clear credit histories could access £2 million mortgages with monthly repayments of £7,016.67 on interest-only, rising to £9,792.02 on full capital repayment over a 30-year term.
Santander for Intermediaries's 4.21% fixed rate has a £999 arrangement fee and a two-percent early repayment charge in year one, which lowers to one per cent in year two. The APRC is 6.7%, and borrowers must make a 40% deposit to qualify. If they do not remortgage or complete a product transfer, the mortgage reverts to the current 7% standard variable rate.
Not long ago, two-year trackers were becoming more popular, but now more lenders offer fixes priced around 4.25%, which undercuts the trackers.
It is still possible to access £2 million tracker rate mortgages without early repayment charges. These allow borrowers to repay the mortgage and switch to a fixed rate without charge. Halifax for Intermediaries currently offers one of the most competitive trackers at 4.83%. There is a £3,999 arrangement fee.
Call Trinity Financial on 020 7016 0790 to determine how much your £2 million would cost.
Lenders offering up to 5.5 times salary for £2 million+ mortgages
Banks and building societies offer more generous income multiples to professionals like doctors, dentists, lawyers or those earning over £100,000. They can also lend more to higher-earning self-employed borrowers and entrepreneurs.
While many applicants may not need the full 5.5 times salary income multiple to borrow £2 million, it is a helpful option, especially if you receive bonuses or have ongoing credit commitments.
Lenders reduce maximum loan sizes if borrowers have children, cars on finance, other properties, or credit cards and loans.
For borrowers keen to secure interest-only, Trinity's brokers have access to 25% deposit interest-only mortgages using the sale of the property as the repayment vehicle. Nationwide for Intermediaries and Santander for Intermediaries have some particularly generous schemes, along with HSBC.
How much is a £2 million five-year fixed-rate mortgage?
Trinity Financial's £2 million+ mortgage specialists have access to a five-year fix priced at 4.07% with a 6.4% APRC. The monthly repayments on a £2 million mortgage would be £6,783.33 on interest-only or £9,629.19 monthly over a 30-year term.
This mortgage has a £1,495 arrangement fee, and borrowers must put down a 40% deposit to qualify. The mortgage reverts to the lender's 7.49% standard variable rate. It is marginally more expensive if you have a 25% deposit. The property will need to have a high energy efficiency rating.
What has happened to £2 million+ mortgage rates recently?
Mortgage lenders have been lowering their rates over the last month as the cost of funding has come down. In recent days, some of the funding cuts have changed, so we may be set to see some price hikes. Multiple Bank of England base rate cuts are likely next year, so there is still an expectation that fixes will come down further in the near term.
Some mortgage lenders provide their cheapest rates to borrowers looking for £1 million+ mortgages, mainly when they take a five-year fix. They also offer lower rates to people purchasing a property rather than remortgaging.
Our brokers have London-based business development managers at the most prominent lenders, who help us swiftly and efficiently arrange larger loan mortgages.
What types of £2 million+ mortgages are borrowers taking?
Aaron Strutt, product director at Trinity Financial, says: "More of our clients are taking two-year fixes rather than five-year deals because they expect mortgages will continue to come down. There has been more talk the Bank of England will reduce the base rate, but this doesn't mean mortgages will come down.
"Many lenders are telling us that there is a relatively even split between their customers taking two- and five-year fixed rates. Halifax recently launched a 1.5-year fixed rate product available for larger mortgage loans."
Is it best to use a high street lender or a private bank for a £2 million+ mortgage?
It depends on the deal's complexity, the applicant's financial situation and the type of property they buy. High street lenders have set up teams to compete with the private banks, and in many cases, they agree to provide similar deals.
Trinity Financial's brokers tend to approach the most prominent lenders, offering competitively priced rates and low arrangement fees before going to the private banks.
It is important to consider what will happen at the end of the initial fixed or tracker rate period and whether the bank or building society will offer you a decent rate switch product. Our brokers typically take this into consideration.
Do lenders offer £2 million+ mortgages on interest-only?
Most lenders providing larger mortgage loans offer interest-only or part-interest-only mortgages.
More banks and building societies are using the sale of the property as an interest-only repayment vehicle. They also accept bonuses, other properties, stocks, and shares as repayment vehicles to satisfy their compliance departments.
Santander for Intermediares has a good interest-only policy. Where any part of the mortgage is on an interest-only basis, the maximum loan-to-value for the overall lending is 85%. Where there’s a combined gross income of £200,000 or more from applicants, any lending over 75% loan-to-value must be on a capital and interest basis. For those with a combined gross income of less than £200,000, any lending over 50% loan-to-value must be on a capital and interest basis. The lender also recently extended the interest-only mortgage term to 40 years.
Lenders accepting more complex income sources for £2 million+ mortgages, including:
- Bonuses higher than the basic salary
- Interest-only mortgages or part interest-only mortgages
- Vested stock bonuses and RSU income
- Stock portfolios (onshore and offshore)
- Income from royalties and trusts
- Global assets
- Income from different companies
- Property portfolio income
Call Trinity Financial on 020 7016 0790 to secure a £2-million mortgage or book a consultation
The information contained within was correct at the time of publication but is subject to change.
Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage
One of the most competitively priced two-year fixes for £2 million mortgages is available through Santander for Intermediaries' large loan team priced at 4.27%.
Wealthier clients with clear credit histories could access £2 million mortgages with monthly repayments of £7,116.67 on interest-only, rising to £9,862.23 on full capital repayment over a 30-year term.
Santander for Intermediaries' 4.27% fixed rate has a £999 arrangement fee and a two-percent early repayment charge in year one, lowering to one per cent in year two. The APRC is 6.7%, and borrowers must put down a 40% deposit to qualify. The mortgage reverts to the current 7% standard variable rate if they do not remortgage or complete a product transfer.
A selection of banks and building societies provide £2 million+ buy-to-let mortgages. Some lenders have higher fees and lower rates products, like BM Solutions. The lender has a 4.03% five-year fix with a 3% arrangement fee.
NatWest for Intermediaries offers one of the cheapest two-year fixed buy-to-let rates for property purchases and remortgages. It is 4.61%, has a £3,499 arrangement fee, and has a maximum loan size of £2 million.
After the fixed-rate period, the mortgage reverts to the lender's current standard variable rate of 8.24%, and the APRC is 6.6%.
The monthly repayments on a 4.59% fixed £2 million buy-to-let interest-only mortgage would be £7,688.33 per month. This rises to £10,264.84 on capital repayment over a 30-year term.
Buy-to-let mortgage lenders use stress tests to work out maximum buy-to-let loan sizes, and they are tougher to meet because of the Bank of England's base rate rises.
Some lenders will take personal and rental income to boost the maximum loan size.
The Financial Conduct Authority does not regulate most Buy to Let Mortgages
The high street banks and building societies have set up large loan departments for selected mortgage brokers to use to provide additional competition to the private banks.
These large loan teams regularly offer mortgages to clients who thought they would have to go through a private bank. They will not ask for assets to be transferred to them as part of a mortgage transaction.
One of the main differences between high street lenders and private banks is that way they calculate how much someone can borrow. A high street lender will assess income and outgoings, basing the application on affordability to determine the amount you can borrow.
Private banks will assess your overall financial situation and also lend against assets including cash, stocks, shares, and properties.
Most lenders have a maximum income multiple for larger loans of between four and five times the salary of single and joint applicants. More banks and building societies will lend up to 5.5 times single or joint incomes for those earning over £75,000 or £100,000.
A limited number of providers offer up to six times salary mortgages.
For high-net-worth individuals with an annual net income of £300,000 or assets worth £3 million, it may be possible to structure a mortgage to meet your requirements.
Trinity Financial specialises in arranging mortgages, and our team of expert mortgage advisers and their assistants do everything possible to secure the most competitively priced rates and the fastest mortgage offers.
We have access to the decision-makers at the lenders offering the leading mortgage rates and provide our clients with a first-class service.
We regularly work with clients over the phone to discuss applications and confirm the documentation we will require, and we also have an office on Upper Street in Islington where we meet clients.
Click here to view some of the mortgages we have arranged over the last 15 years.
If you are in a rush to purchase a property, can't secure a mortgage quickly enough, or can't sell your property, then bridging lenders help borrowers get transactions through.
Bridging loans are also used to pay for refurbishment work to bring properties up to standard for mortgage purposes, to buy at auction and for other business purposes or to buy land.
Trinity Financial has access to a bridging lender offering a 0.59% per month rate up to 50% loan-to-value. It has a 2% completion fee, and it is available for loans between £75,000 and £15,000,000. The price gets marginally more expensive if you have a smaller deposit.
Some of the big banks provide bridging loans, and we have access to a lender offering £1 million+ bridging loans and the rate is typically 2% over the Bank of England base rate.
It has a 1% arrangement fee and no exit fees. The interest is calculated on a daily basis, and it can do higher loan-to-values for those with clear exit routes. For many larger bridging transactions, this product is hard to beat.
The lender will also offer a mortgage product once the applicant or their property is in a suitable position, so they do not have to refinance.
Our brokers are used to working with clients with complex financial situations and the mortgage lenders offering highly competitive large loan rates have the experience to agree these applications.
If you own your own company of you're a director of a number of firms, we have access to lenders that will assess your overall financial situation. They can also take a range of overseas income including dollars and euros.
At least 50 banks and building societies provide interest-only mortgages.
Most of the larger lenders expect borrowers to earn in excess of £75,000 to qualify.
Sometimes the whole mortgage is available on interest-only, or for lower deposit mortgages we regularly arrange for 50% of the mortgage on an interest-only basis and 25% of the loan on capital repayment.
Private banks regularly ask wealthier clients to make bullet repayments and they are linked with their bonuses to bring the loan-to-value down. These repayments are written into the mortgage contract.
If you earn over £250,000 one bank provides full interest-only for those with a 25% deposit.
Smaller lenders are offering interest only to applicants with lower incomes who use the sale of the property as their repayment vehicle.
Remember, you need a plan to repay the mortgage or the outstanding balance will remain the same. Part interest and part capital repayment mortgages are often a better option.
It should take around ten working days for a £2 million mortgage to be agreed when the lender receives all of the documents it needs.
Some banks and building societies use system-generated property valuations rather than sending a valuer to assess the property and this speeds up the process.
If you would like to get a thorough inspection of the property our brokers can recommend specialist firms or you can find a local property surveyor.
Get started today
Speak to one of our mortgage experts. Book an appointment to come and see us or request one of our experts to call you.
