How much income do I need to earn for a £2 million mortgage?
Mortgage lenders generally offer between four and 5.5 times salary to determine if they will issue £2 million mortgages.
Some lenders require single or joint applicants to earn at least £500,000 a year to qualify for £2 million, while others expect them to make just over £363,000. The most generous lenders will require them to earn at least £333,333 each year.
Some mortgage lenders will lend against assets or investment portfolios and can use high-net-worth borrower exemption rules to issue larger loans. This means asset-rich and cash-poor clients can still secure larger mortgage loans.
How many mortgage lenders offer £2 million mortgages?
Trinity Financial has access to various banks and building societies that offer multi-million-pound mortgages. One lender has select mortgage rates between £1 million and £5 million and offers a five-year fixed rate of close to 4.5% with a £999 arrangement fee.
Aaron Strutt, product director at Trinity Financial, says: "Many mortgage lenders are still keen to attract wealthier buyers and issue larger mortgage loans. They actively try to undercut the private banks with lower rates and cheaper arrangement fees.
"Assessing the market before locking into a multi-million-pound mortgage is essential to ensure you get the most competitively priced rates. Our brokers regularly speak to clients who are remortgaging away from private banks or seeking funding to buy a new prime property postcode.
Do the lenders use income multiples for £2 million mortgages?
Banks and building societies use mortgage affordability calculations to determine how much you can borrow. The figures they use to generate the maximum loan sizes change significantly depending on the lender.
Providers increasingly offer more generous mortgages to entrepreneurs, CEOs and company directors. They are also keen to attract bankers and city professionals.
When generating the maximum loan, the lenders will assess your monthly outgoings and credit commitments, but some are more lenient. For example, some providers do not reduce the loan size if you have children, while others take higher bonuses or commissions into consideration.
Credit cards, loans, cars on finance and kids in private schools reduce the amount people can borrow, although some lenders are more lenient on specific credit commitments.
How much of a deposit will I need for a £2 million mortgage?
Applicants will need a deposit of at least ten per cent generally, although to secure the mortgage competitively priced rates, they will need a 35 per cent or 40 per cent deposit.
Can professionals like doctors and dentists borrow more when applying for £2 million mortgages?
It is possible for professionals like Accountants, Actuaries, Architects, Barristers (including Barristers in Pupillage), Dentists, Chartered Engineers, Medical Doctors, Optometrists, Pharmacists, Solicitors, Chartered Surveyors and Vets to borrow six times their salary.
Applicants would need a single or combined income of at least £333,333 to borrow £2 million at six times their salary.
How much are £2 million mortgage rates?
Banks and building societies have been lowering their mortgage rates, and there are now sub-5% two-year fixes, and some five-year fixes are getting closer to 4.5%. The average mortgage rate for borrowers with larger deposits is around five per cent.
Click to view our large mortgage loan best buy table and borrowing calculators.
Call Trinity Financial on 020 7016 0790 to secure a mortgage or book a consultation
The information contained within was correct at the time of publication but is subject to change
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