How much does a £2 million mortgage cost in the UK?
Few mortgage providers are lending £2 million; it is not common for high street banks or a standard mortgage broker to agree to a million-pound mortgage loan. There are also strict criteria and it is not always easy to find the best £2 million mortgage deal by yourself.
You’ve found the right place if you are looking for a £2 million mortgage. This guide will explain how to obtain a 2 million mortgage, the monthly repayments, and where you can get assistance from a mortgage broker who specialises in large mortgage loans.
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What is the cost of a mortgage for two million pounds?
Mortgage brokers can offer different rates and terms depending on your financial and personal situation. The cost of a £2 million pound mortgage may vary greatly.
Private lenders will assess your affordability using factors like credit history and income.
Contact us today for free mortgage advice for high-net-worth mortgages.
Additional to these factors, your monthly payment amount will also depend on:
- The interest rate
- The mortgage term
- You have the amount of your deposit
- You can choose to have a capital repayment or an interest-only mortgage
It can be difficult to predict how much a £2 million mortgage will cost. However, an online mortgage calculator can give you an estimated guide for your monthly repayments.
You should also consider additional costs
Some borrowers forget to consider the other costs associated with purchasing a property when they are so excited about applying for a mortgage.
These costs can be included in your affordability calculation for a £2 Million mortgage.
These could include:
- Valuation fees
- Solicitor fees
- Arrangement fees
- Book fees
- Insurance costs
- Stamp duty
What amount of income do you require to lend £2,000,000?
Most lenders will consider your income. They will look at your earnings and apply a multiplier to your affordability for a £2 million house mortgage. Each lender will use its own criteria to assess affordability within these parameters.
One lender might say they will lend 4.5x the applicant’s income, while another lender may offer loans up to 5x.
A few mortgage providers will offer loans up to 6x earnings. However, this would only be possible in very exceptional circumstances.
The total amount you can borrow, regardless of whether you are looking for a 30-year mortgage on a £2 million property or a £2.4-£2.5 million property, could be significantly different.
A £2 million mortgage application would require a salary of £450,000 per year, based on 4.5x your income.
You could be eligible for a mortgage of up to £2,025,000. However, if your lender allows 5x your salary, your income must be £400,000.
Lenders might also want to consider your income and outgoings to determine if you are able to afford mortgage repayments for a two-million-pound mortgage. Before you apply, a mortgage advisor can calculate it for you.
The chances of your mortgage application being rejected can be reduced by knowing the cost of the mortgage you can afford before applying.
How your income type might affect your application
Most often, people who are able to afford a £2,000,000 mortgage will have complicated income arrangements to make it more tax-efficient.
As every lender has its own rules about income types, it is a good idea to have one of our expert brokers review your income. This could help you find two lenders who will offer you very different amounts.
How to get a £2 million commercial mortgage
Although you can get a commercial mortgage for this amount, the lender will have to approve your application. There are two types of commercial mortgages available. You need to consider which one you want.
The owner-occupier mortgage is used to purchase property as a trading place. In contrast, the commercial investment mortgage is used to invest in commercial property (often to be let out for profit).
Your company’s financial situation will determine your eligibility for a £2,000,000 commercial mortgage. However, lenders will also need to know your purpose, outgoings, and the number of employees.
This information will allow a provider to determine how much you can afford each month for a commercial mortgage.
FAQ’S
What is the cost of a £2 Million buy-to-let mortgage?
Not many banks and building societies offer £2 million+ buy-to-let mortgages. The rates are comparable to residential rates.
NatWest for Intermediaries offers one of the most affordable two-year fixed-rate buy-to-let properties. The loan is priced at 2.15% and comes with a £2,495 arrangement charge. The maximum loan size is £2,000,000.
After the fixed-rate period, the mortgage will revert to 4.49% above the Bank of England base rates and the APRC at 4.7%. The monthly payment for a £2,000,000 interest-only mortgage would amount to £3,583.33 per month. On a 30-year term, the capital repayment would bring this up to £7.543.
Our brokers have a track record of accessing large mortgage loans. As the lenders continue to lure landlords to buy more properties or remortgage, the cheapest residential mortgage is shrinking.
Do I need a private bank in order to get a £2,000,000 mortgage?
High street banks and building societies have established large loan departments to allow selected mortgage brokers to compete with the private banks.
These large loan departments offer mortgages to clients who thought they would need to go through a bank. They will not ask for assets to transfer to them in a mortgage transaction.
The way that they calculate the amount of money someone can borrow is one of the major differences between private banks and high street lenders. High street lenders will evaluate your income and outgoings to determine how much you can borrow. Private banks can assess your financial situation and lend against assets. They also have the ability to take cross-charges against other properties.
Is there a maximum income multiplier for a £2,000,000 mortgage?
Lenders typically limit loans to four to five times the salary of single applicants and joint applicants. However, some lenders will lend up to 5.5 times single income or joint incomes. Only a few providers will offer six-times salary mortgages.
Is it worth getting a bridge loan?
Although the cost of bridging loans has fallen significantly over the past few years, they remain a costly form of financing.
Bridging lenders can help borrowers complete transactions if they’re in a hurry to buy a property or can’t get a mortgage fast enough.
These loans can also be used to finance refurbishments to make them suitable for mortgage purposes, buying at auction or other business reasons, and purchasing land.
We have access to a bridging lender that offers a 0.48% monthly rate and up to 50% loan to value. There is a 2% fee for completion and the loan amount can be between £75,000 to £15,000,000. A smaller deposit will make the price marginally higher.
We have access to a lender that offers bridging loans of up to £10 million. The rate is usually 2% higher than the Bank of England base rates. There is no exit fee and an arrangement fee of 1%. It calculates interest on a daily basis. For those who have clear exit routes, it can do higher loan-to-values.
If I have earned income or retained profits from abroad, can I qualify for a £2,000,000 mortgage?
Our brokers have extensive experience working with clients in complex financial situations. The mortgage lenders that offer large loans at highly competitive rates are able to approve these applications.
We have lenders who can assess your financial situation, whether you are the owner of your own business or a director of several firms. They are also able to accept a variety of income from overseas, including dollars and euros.
What are the rates that interest-only mortgage lenders offer?
Minimum of 50 banks and building societies offer interest-only mortgages in the UK.
Larger lenders require that borrowers earn at least £75,000 to be eligible.
Sometimes, the entire mortgage can be obtained interest-only. For lower deposit mortgages, we arrange for 50% of the mortgage to be paid on an interest-only basis. We also arrange for 25% capital repayment.
Private banks often ask wealthy clients to make bullet payments. They are also linked to their bonuses to lower the loan-to-value. These repayments are included in the mortgage contract.
Is it possible to get a £2 Million mortgage approved in a short time?
A £2 million mortgage agreement should take approximately 10 working days once the lender has received all the necessary documents.
Some lenders prefer to use computer-generated property values rather than having a property appraiser. This speeds up the process. Our brokers can refer a specialist firm if you need a detailed inspection of the property.
Read more:
- £1 Million pound mortgages
- £1.5 Million mortgages
- £3 Million mortgages
- £4 Million mortgages
- £5 Million mortgages
- High net worth mortgage guide
- Mortgages over £6 million
- Private and discreet mortgages (high value)
Let us match you with the right mortgage broker for your £2,000,000 mortgage today
Our expert brokers are on hand to help you get a large value mortgage discreetly and will quickly assess your circumstances to match you with the best advisor to help you get a £2,000,000 mortgage deal.
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