Million Pound Mortgage
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Million Pound Mortgage
Aaron Tyson talks to us about million pound mortgages.
What is a million pound mortgage and how do I qualify for one?
When we’re looking at mortgages of a million and over, there are a couple of considerations based on the level of borrowing. We often find that banks cap the maximum lending at 90% or 95% Loan to Value.
That requires larger deposits or more equity within the property – even where clients have more than ample income. It’s just in relation to liquidity requirements.
Aside from that, it’s the same as all residential mortgages, where achieving a mortgage is always driven by income. We’re recording this in November 2025, and at the moment we need to see around £182,000 in earned income to achieve £1 million in mortgage borrowing. That’s roughly 5.5 times gross combined incomes.
Loan to Income multipliers change regularly because it’s a robust environment. One lender is currently offering mortgages at 6.5 times gross combined income. In that scenario, a million pound mortgage required a minimum income of £154,000. Historically, over the last 10 or 15 years, we haven’t seen income multiples at those levels.
That’s just one area of criteria. It’s our role to understand those and keep up with changes across the market. There are around 240 lenders in the UK and each bank operates differently.
What types of £1 million+ mortgages are borrowers taking?
It all comes down to clients’ perspectives on the future of interest rates. We can give you lots of information and metrics to understand what’s happening in the UK economy and predictions around the base rate. It’s not just our opinion. It’s based on views from BlackRock, HSBC and other large financial institutions around the world.
Some people prefer stability and like their payments to remain the same for budgeting purposes. These clients are likely to prefer a fixed rate, regardless of whether the mortgage is for £1 million or more.
Those with a more relaxed attitude to risk and volatility might prefer a variable-rate mortgage. Interest rates are generally falling as we speak in November 2025, despite all the noise around inflation, the job market and economic growth.
The overarching principles are still the same – we’re expecting interest rates to continue to fall well into late next year. A tracker mortgage could help you benefit from that. If you’re open to interest rates and monthly payments changing, you may see an upside.
With larger mortgages, even small changes in interest rates can result in large savings. It’s all part of exploring what’s good for the client, what they want and building a plan from there.
What’s the difference to mortgage repayments on a two-year and a five-year fixed rate for a £1 million mortgage?
Generally, five-year fixed rates are priced slightly higher than two-year rates at the moment, in November 2025. Based on this, if you opt for a five-year fixed rate, you can expect a higher monthly payment.
That being said, some lenders offer higher levels of borrowing on a five-year deal. Getting that enhanced affordability can be part of the overall decision, depending on your borrowing requirements. This is something we’ll naturally explore in our conversations with clients.
What is the monthly payment on a million pound mortgage?
On a repayment mortgage, where you’re paying the debt back over time, we need to know the mortgage amount, the interest rate, and the overall term of the mortgage to calculate what the monthly payments will be. We need to talk to clients and understand their needs to calculate this accurately.
But it’s simpler to assess the size of an interest-only mortgage payment. The average mortgage rate in November 2025 is around 4% on a 60% to 95% mortgage. Based on that, a £1 million mortgage interest-only payment will be around £3,333 per month.
We’re expecting interest rates to fall which could reduce that, but that’s a broad guideline.
Can I get an interest-only million pound mortgage?
We just talked about interest only and it’s certainly possible. As context, interest-only mortgages had a complete overhaul post 2008, and we now see lower income to loan multiples.
That means more income is needed to support an interest-only mortgage compared to a repayment product. Minimum income levels are also often enforced by lenders and there’s a lower maximum loan size as a percentage of the property’s value.
Often, borrowing is limited at a maximum of 50% of the property’s value on interest only. In recent years that has relaxed a little, up to a maximum of perhaps 75% depending on the situation and property value.
There’s also the option to have a blend of interest only and repayment – there can be two different repayment types on the same mortgage.
Lenders also require you to have a valid repayment vehicle for the interest-only proportion. The debt is not expected to be repaid until the end of the mortgage, but there needs to be a plan.
It could be selling the property at the end of the mortgage term – but often people don’t want to do that when they actually reach this point. You could potentially use a tax-free lump sum from your pension pot, depending on its size. You may have other savings or investments, or equity in other property.
Interest-only lending is geared towards higher earners and high net worth individuals – that’s just the nature of the criteria that clients need to meet.
Can I get a million pound mortgage for a Buy to Let property?
There’s no reason why not. On residential mortgages, affordability is based on the client’s direct financial position – your income. Buy to Let affordability is focused on the property as the investment vehicle.
Residential affordability allows you to purchase many different properties, while Buy to Let can be more property-specific. It all depends on the rental income the property can generate and the overall property value.
It can therefore be more challenging in a higher interest rate environment, but it’s certainly possible. We may even be able to consider private banking options. For million pound mortgages in general, more doors are opened to private banking, because of the level of income required to achieve that level of borrowing.
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Can I get a million pound mortgage if I have bad credit?
Bad or adverse credit always depends on the exact situation. But as a general rule, the longer ago any adverse credit was, the less likely it will be to affect your mortgage options.
The least severe credit issues are late payments on utilities, followed by missed payments on credit cards. That’s the lower end of the spectrum. More serious events are missed mortgage payments, defaults, County Court Judgments (CCJs) or previous bankruptcy.
With more serious credit challenges, we’ll look for lenders that will accept whatever’s on the credit file. It’s the same as any other aspect of criteria – each bank has their own guidelines for what they will accept.
It’s also not just credit score. Many clients have a good credit score, but banks also look at your conduct – it’s a combination of those two together. By understanding the exact credit position, we can be specific about the potential ways forward.
How does the remortgaging process work on a million pound mortgage?
Remortgaging is refinancing the property. The new mortgage could be like-for-like borrowing, where you’re not increasing the size of the loan, or you may want to raise capital for debt consolidation or other spending. You may wish to make a capital overpayment to reduce the loan.
A remortgage is where you move from the existing bank to a new provider. Maybe the property has increased in value, or you have a specific requirement that’s not available with your current lender.
We’ll always explore the option to switch rates or do a product transfer with your current lender, and compare that with your remortgage options.
In terms of affordability and loan to income multiples, remortgaging is broadly the same as a purchase. There can generally be a little more leeway with affordability if you’re not borrowing any additional funds.
What fees are there on a million pound mortgage?
Fees are hugely important in achieving value. Firstly, we don’t charge any fees for mortgage cases. You can read more on our fees page.
We’re also going to factor in stamp duty if it’s a purchase, plus legal fees. There may be estate agent fees if you’re moving home. There are also fees for mortgages specifically – called product fees, also known as arrangement fees or completion fees. These fees are nothing to do with our service or the bank’s admin.
The point of product fees is to purchase a lower interest rate. So where we’ve got a larger mortgage fee, the more impact that will have on the interest rate. It tends to make more financial sense to opt for a lower rate with a product fee.
With high street lending options, where we find the lowest interest rates, fees can range from zero up to £999. These can generally be added to a loan to reduce the capital involved in the purchase.
Of course, clients are concerned about having enough deposit plus the cash to cover stamp duty and legals. So you don’t have to pay product fees upfront – we can add these to the loan. Generally, valuation fees are free, but it depends on the specific lender.
Away from the high street, the fees on private banking mortgages can vary considerably. It can sometimes be a percentage of the amount you’re borrowing. There’s also a difference in fee structures between Buy to Let and residential [information correct at time of recording in November 2025].
Do mortgage lenders accept income from commission and bonuses?
Yes, and each bank has a different way of assessing non-regular income: commission, bonuses over time – whatever it may be. Some lenders will utilise 60% of the most recent year’s commission or bonus, while others may go up to 100%.
We will be driven towards one or another based on the client’s needs, maximum affordability and market value. We take a blended approach to our advice.
We do all our meetings by video call, so we always show you what your options look like on screen and explain why we’re recommending a certain lender. We like to be fully transparent and ensure that all key information is available.
Will mortgage lenders accept income paid in a foreign currency?
Yes. This has been a really interesting area over the last six months. We’re seeing lenders come into the market for foreign currency – although most lenders don’t accept this at all.
Depending on the currency, we can approach specific lenders and explore the options.
Income in foreign currency can be utilised, but it’s almost always a requirement for you to be a UK-resident. You can’t be earning this income and living somewhere else if you want to buy residential property in the UK – you need to be resident here.
You’ve demonstrated throughout how a mortgage broker can help, but is there anything else to consider?
The questions in this episode show how differently banks approach mortgage lending in the UK. It’s a vibrant market with very expansive acceptance criteria.
You might have a particular need in a certain area and one bank will offer you a competitive deal – yet another bank may not accept you at all. That’s why it’s so difficult for clients to make decisions independently, or even just go to their bank.
It’s far better to access an open market proposition rather than just look at what your current bank can offer. They may just not have the right criteria for you.
As context, banks mitigate risk by having these specific requirements. They prefer to lend in certain areas that feel comfortable – both to them and the shareholders. They like to have more control over certain areas of criteria. At the same time, they want to compete with each other, which is what makes the UK mortgage market so vibrant.
Some banks want to be top of the market in certain areas and others are happy to be completely priced out. Foreign income is a good example. It’s key for us to understand all of this so we can advise our clients correctly.
It’s not just about knowing the criteria. If you’ve got 15 minutes, feel free to Google any bank and look at their criteria page. It’s not fun reading.
It’s more important to know how an underwriter is going to receive the case, looking at certain aspects of those criteria. That’s how we can ensure expectations are met, plus smooth processing – ultimately resulting in happy clients.
Key Takeaways:
- Qualification for a million-pound mortgage is primarily driven by income. In November 2025, around £182,000 of earned income was typically needed.
- Banks often cap maximum lending at 90% or 95% Loan to Value (LTV) for mortgages over £1 million, requiring a larger deposit or more equity.
- The choice between fixed-rate and variable-rate mortgages (like trackers) depends on the client’s perspective on the future of interest rates and risk tolerance.
- Interest-only million pound mortgages are available but require higher income and have a lower maximum Loan to Value, along with a mandatory repayment plan.
- Given the vast number of UK lenders (around 240) and their varied criteria, a mortgage broker is essential to find the most suitable deal and understand the underwriter’s perspective.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
For specialist tax advice, please refer to an accountant or tax specialist.