Product of the week: mortgages over £1million for residents and expats

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Many of our high net worth clients require mortgages over £1million. However, a large loan proportionally results in a large deposit. Even for those with very healthy salaries, saving a 30% deposit on a £1million loan is a considerable commitment, and may not be possible if you wish to maintain your liquidity for other reasons. Therefore, our clients frequently ask if they can arrange mortgages over £1million with a high loan to value (LTV) of up to 85%.

There are very few lenders who will stretch to 85% LTV for mortgages over £1million. Those who will typically offer finance at a higher interest rate, which is understandably undesirable for clients. Fortunately, we work with a lender offering mortgages over £1million with a very appealing interest rate feature.

This lender will not increase the interest rate on offer in line with the LTV. Typically, the higher the LTV, the higher the interest rate of your product will be. Although this varies across cases and lenders, in my experience, an interest rate can increase by as much as 2% between 60% and 85% LTV.

Lenders who don’t increase their rates incrementally in line with LTV are very rare. As an additional bonus, for mortgages up to 80% LTV, this lender can accommodate for a large portion of the loan to be on an interest only repayment basis. This is a fantastic way of minimising your monthly costs.

As this lender is a private bank, rates are offered on a case by case basis. However, as a general guide, you could look to secure a 2-year fixed rate of 1.89% or a 5-year fixed rate at 2.24%. Furthermore, if you would like to protect yourself again a potential interest rate rise, this lender also offers a 10-year fixed rate of 2.79%.  On their fixed rate, this bank offers a 10% tolerance each year for overpayments without triggering early repayment charges.

This bank’s flexible attitude also means they can lend to those who don’t have the permanent right to work in the UK. As such, if you are an expat or foreign national client looking to purchase in the UK, this could be the product for you.

You will need to open a bank account with the lender to access this product; they offer an excellent banking service and are widely regarded for the quality of their customer service. A minimum loan size of £1million is required.

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