Are you looking for a large mortgage in the UK? In a complex market with so many products available, it can be difficult to know which option will benefit you most. Many clients approach us with a rough idea in mind of what they would like to achieve from their mortgage—for example, a 2-year fixed rate—but this often changes once we fully explain the benefits and drawbacks of different products.
The best large mortgage products for you: fixed vs. variable
Deciding whether you go for a fixed or variable interest rate is an important decision, and our advice on this matter will vary depending on your situation and aims. Often, if you are looking to take out a large loan, you will want a fixed rate mortgage to minimise your risk if the interest rate changes. On a large loan, a rate rise of just 0.25% could have a significant effect on your monthly repayment.
As such, a fixed rate mortgage offers stability and certainty, allowing you to budget accordingly. Clients looking for a large mortgage in the UK should certainly consider this, given that interest rates are likely to go up over the next few years. A recently expected rate rise failed to occur, but with the Monetary Policy Committee (MPC) set to meet again soon, a base rate increase is still very much on the cards.
However, many of my high net worth mortgage clients require flexibility and freedom above certainty. Variable mortgage products provide this freedom, Variable rates generally have no early repayments charges (ERCs), allowing you to make early repayments if you should wish to.
The best large mortgage products for you: short or long term?
Like a variable rate, a shorter mortgage product term gives you more flexibility. With a 2-year term, you have the freedom to re-evaluate your situation and act accordingly. Whether you want to pay your mortgage down, refinance or release equity from a property that has increased in value, a shorter term offers you freedom. Again, in our experience, many high net worth clients like to maintain fluidity.
However, if you are purchasing a residential property—perhaps investing a large amount of money into a ‘forever home’—then you may as well take advantage of the security offered by a longer mortgage product term. By going down this route, you can also avoid the charges that come with refinancing your property repeatedly. Some lenders are now offering 10-year fixed rates, which could be a great option if you want to mortgage a family home and want to protect yourself from base rate increases.
Finding your best solution with a bespoke service
Ultimately, each client is unique—the best route for you will depend entirely on your personal circumstances, so if you are looking for a large mortgage, we will work closely with you to gain a thorough understanding of your circumstances.
If you need a large mortgage over £2million, Enness Private Office offers a totally holistic and bespoke service, so you can rest assured the advice you receive will be fully tailored to your needs and expectations.