How much does a £1.5 million mortgage cost?
£1,500,000 Mortgage: Monthly Repayments & Income Requirements
£1.5 Million Mortgage Requirements
Discover how you can secure a £1.5 million mortgage with expert guidance from Trinity Financial.
To qualify for a £1.5 million mortgage, you typically need a deposit of at least 10% of the purchase price, though some lenders may require up to 20%. Additionally, a single or joint income of at least £300,000 is usually required.
At the time of writing this article, the estimated monthly repayments for a £1.5 million mortgage are around £4,812 on interest-only or £7,032 on capital repayment. This calculation is based on an interest rate of 3.75%, a 30-year term, and a capital repayment structure. Providing applicants have a 40% deposit.
In this guide, we’ll outline expected repayments, income requirements, and other key factors affecting your mortgage costs.
How many lenders offer £1.5 million mortgage?
A surprising number of mortgage lenders offer larger mortgage loans, including many of the high-street banks and building societies. HSBC, Santander, Halifax, and NatWest typically offer competitively priced larger mortgages. Private banks like Coutts, Investec, and Barclays also want to issue larger mortgages.
How much does a £1.5 million mortgage cost per month?
Lenders determine mortgage affordability based on income and expenditures, applying a multiple of earnings to assess borrowing capacity. Since criteria vary across lenders, some may offer more flexibility than others, particularly for high-value loans.
Most lenders base affordability on salaried income, typically allowing borrowing up to 4.5 times annual earnings. In some cases, this may extend to 6 times income. A portion of annual bonuses may also be considered, though rarely in full unless through specialist providers. Additionally, lenders assess fixed expenses such as childcare, private school fees, cars on finance, gym memberships and credit cards or loans through a process known as ‘stress-testing.’
If you had a 25% deposit the monthly repayments on a £1.5 million interest-only mortgage would be approximately £5,312.50, increasing to £7,379.10 on a full capital repayment mortgage over a 30-year term. This based on a rate of 4.25%.
Deposit Requirements for a £1.5 Million Mortgage
Lenders generally require a deposit between 10% and 20% of the property value. The loan-to-value (LTV) ratio plays a crucial role—lower LTVs reduce lender risk and result in lower repayments.
Many high-street lenders enforce income caps for high-value loans, typically limiting lending to 75-80% LTV for mortgages above £1 million. This means that, depending on the lender, you may need a minimum deposit of 10% to secure financing.
However, if you meet the necessary criteria and present a strong application with minimal risk factors (such as a good credit history and large income), you may still secure a £1.5 million mortgage with standard deposit requirements similar to those for conventional residential loans.
Call Trinity Financial on 020 7016 0790 to secure a £1.5 million mortgage, submit a questionnaire or book a consultation
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
Nationwide for Intermediaries offers a two-year fix at 3.89% for larger mortgage loans between £300,000 and £5 million for borrowers purchasing a property. The overall cost for comparison is 7.1% APRC. The fixed rate is 0.05% more expensive for remortgages.
If you borrowed £1 million on the 3.89% two-year fix, the monthly interest-only cost would be £3,241.67 increasing to £4,710.95 on capital repayment over a 30-year term.
This mortgage is available on either an interest-only or capital repayment basis, and borrowers require a 40% deposit to access the rate. After two years, Nationwide's mortgage will revert to a standard variable rate of 7.24% unless you switch deals, and early repayment charges apply
Contact Trinity Financial on 020 7016 0790 to find out how much your £1 million mortgage would cost.
At least 50 banks and building societies provide interest-only mortgages.
Most of the larger lenders expect borrowers to earn in excess of £75,000 to qualify.
Sometimes the whole mortgage is available on interest-only, or for lower deposit mortgages we regularly arrange for 50% of the mortgage on an interest-only basis and 25% of the loan on capital repayment.
Private banks regularly ask wealthier clients to make bullet repayments and they are linked with their bonuses to bring the loan-to-value down. These repayments are written into the mortgage contract.
If you earn over £250,000 one bank provides full interest-only for those with a 25% deposit.
Smaller lenders are offering interest only to applicants with lower incomes who use the sale of the property as their repayment vehicle.
Remember, you need a plan to repay the mortgage or the outstanding balance will remain the same. Part interest and part capital repayment mortgages are often a better option.
At Trinity Financial, we constantly monitor the £1 million+ mortgage market. Click here to view our £1 million mortgage table, which highlights the pick of the large loan rates.
https://www.trinityfinancialgroup.co.uk/mortgage-tools/million-pound-mortgage-best-buys/
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