Is it possible to arrange a £1 million+ buy-to-let mortgage?
Page updated 19/04/2024.
Trinity Financial's brokers can secure landlords' £1 million buy-to-let mortgages through a range of lenders, including bigger banks, building societies, and specialist providers.
After struggling to issue as many mortgages as usual in recent years, lenders are keen to issue larger buy-to-let mortgages to landlords purchasing or remortgaging houses, flats, or HMOs. They are also more open to development finance and bridging loans.
Fewer lenders offer £1 million+ buy-to-let rates than in the residential mortgage market, but lots are still available. The number of lenders reduces when landlords want to secure £1.5 million or £2 million+ buy-to-let rates.
Aaron Strutt, product director at Trinity Financial, says: "As mortgage rates have increased, many buy-to-let lenders have started offering low rate and high arrangement fee products. The higher fee rates tend to be taken by landlords who need the lower monthly costs.
"The Mortgage Works is offering a sub-4% two-year fixed rate with a 3% arrangement fee, and Metro Bank for Intermediaries offers a similar deal with a 5% arrangement fee. These are available for larger loans.
"Lenders like BM Solutions and NatWest for Intermediaries offer rates around 4.5%, although the arrangement fees range between £999 and £3,499."
Are two or five-year buy-to-let fixed rates the cheapest?
Most lenders offer a selection of two-, three- or five-year fixed rates, and some issue Bank of England base rate trackers. The lowest rates tend to be the five-year fixes unless you pay a high arrangement fee and take a shorter-term deal.
In many cases, landlords have to take five-year fixes so that the rental stress test calculations stack up. Buy-to-let lenders can issue more generous loan sizes when borrowers opt for longer-term fixes.
They calculate the maximum loan size based on a property's rental income. Some use 'top slicing,' where they can use personal income and rent to increase the maximum mortgage borrowing.
Are landlords still purchasing buy-to-let properties?
Figures from UK Finance show the value of new buy-to-let lending in the UK in Q4 2023 was £6.3 billion, down 55.4 per cent compared with the same quarter in the previous year.
This clearly shows that buy-to-let lending has reduced, but there is more interest in the sector as rents increase and first-time buyers find it harder to get on the property ladder. We are speaking to more landlords refinancing to get the most competitive rates and reduce their outgoings.
UK Finance says the average gross buy-to-let rental yield for the UK in Q4 2023 was 6.74 per cent, compared with 5.85 per cent in the same quarter in 2022. It also says the average interest rate across all new buy-to-let loans in the UK rose to 5.7 per cent in Q4 2023, up from 3.67 per cent a year previously.
Call Trinity Financial on 020 7016 0790 to secure a £1 million buy-to-let mortgage, book a consultation, or complete our mortgage questionnaire.
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
The Financial Conduct Authority does not regulate most Buy to Let Mortgages
The Mortgage Works maximum loan size is £1.5m and Santander’s maximum loan size is £750,000.
NatWest for Intermediaries, Metro Bank and Barclays for Intermediaries all have a maximum loan size of £2 million.
To access the most competitively priced buy-to-let mortgage rates landlords will typically require a 40% deposit.
Larger buy-to-let mortgages are available if you have a 25% deposit.
There is a selection of banks and building societies providing £1 million+ buy-to-let mortgages.
BM Solutions, previously known as Birmingham Midshires, offers one of the cheapest two-year fixed-rate buy-to-let mortgages. It is priced at 4.01%, has a £3,999 arrangement fee, and has a maximum loan size of £1 million. Applicants will need a 35% deposit to qualify.
After the fixed-rate period, the mortgage reverts to the lender's 9.34% standard variable rate, and the APRC is 6.7%. The mortgage is available on interest-only, and the monthly payment on a £1 million mortgage would be £3,341.67 per month. It would rise to £4,779.92 on full capital repayment over 30 years.
Trinity Financial's brokers have access to the key decision-makers and BM Solutions, and they can get mortgages agreed promptly.
The buy-to-let mortgage market has changed over the last year, but mortgage rates are decreasing.
Mortgage lenders calculate the maximum lending amount using a property's rental income. More lenders allow landlords to borrow more using any income they earn.
The Financial Conduct Authority does not regulate most Buy to Let Mortgages
Trinity Financial specialises in arranging £1 million+ mortgages and our team of expert advisers do everything possible to secure the cheapest rates and the fastest mortgage offers.
More of the lenders have set up specialist lending teams to agree larger mortgage loans, and they have separate processing teams to underwrite applications.
We regularly work with clients over the phone to discuss applications and confirm the documentation we will require, and we also have Mayfair based offices where we meet clients.
Click on the link to view some of the mortgages we have arranged over the last ten years. https://www.trinityfinancialgroup.co.uk/case-studies/
Some lenders can use an applicant’s personal income as well as the rent to provide larger mortgage loans. This is useful for landlords when their property does not enough rent to qualify for a sufficient mortgage.
Trinity Financial has access to a host of banks including Barclays for Intermediaries and Metro Bank to secure more generous mortgages for those with larger incomes.
The banks use ‘top-slicing’ to assess personal incomes along with the rent to boost the loan sizes. The application has a larger chance of going through if you have lower credit commitments and monthly outgoings.
• You contact one of our consultants by calling 020 7016 0790 or complete our basic enquiry form or mortgage questionnaire for a more detailed initial response.
• You tell us what you are looking for and the property type you want to buy. We assess your mortgage and financial protection needs based on your monthly budget.
• We collect the information and documentation the lenders and providers need.
• Based on the information supplied, we provide you with illustrations of the most suitable products for your circumstances.
• We then submit the application on your behalf to secure a mortgage offer as quickly as possible. This is once you have confirmed you are happy to proceed.
• We manage the application through to completion and liaise between all involved parties, such as valuers, estate agents and solicitors.
• Post-completion, we are available for any questions. When you reach the end of your initial product, we can also discuss any further mortgage, will or financial protection product requirements.
As part of our ongoing service commitment - we will contact you at least three months before your fixed or tracker rate expires to ensure you avoid reverting to an expensive, standard variable rate.
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.
