Perhaps you’ve got your eye on a £1 million flat in London or a holiday home with jaw-dropping views in Cornwall. If you’re part of the high-net-worth club, you may wonder what salary you need to buy a property that’s in the millions. We’re providing the mortgage advice you need to know what to expect and how to prepare when acquiring a mortgage on a luxury property.
What salary do you need?
As a general rule, lenders will provide between 4.5 and 6 times the value of your income. As a rough estimate, you may need a salary that’s in the region of £170,000 and £200,000 per year to secure a £1 million mortgage.
However, when you’re borrowing as a high-net-worth individual, traditional borrowing terms may not always apply.
It’s important to speak with a specialist mortgage broker. This is because they often partner with lenders that are more likely to take complex income and other assets into account. So, essentially, as long as you can prove that you have the finances or collateral to contribute to the repayment of a mortgage, a specialist broker could help you secure that £1 million mortgage.
Lending criteria vary from lender to lender, but by seeking the support of a Whole of Market broker, you could increase your chances of finding a suitable lender and mortgage.
A broker will also give you up-to-date rates and advice backed by experience. With their comprehensive support during the application process, they’ll save you a lot of time and hassle.
What influences repayments?
- How you choose to pay back your loan
Your two main options will include a repayment mortgage and interest-only mortgage, although you may also be able to secure investment-backed repayments. - Economic fluctuations
If you opt for an interest-only mortgage, then economic fluctuations will have an impact on your monthly repayment amount. This is because you pay back the interest amount each month rather than the loan itself. However, this can be a beneficial option for high-net-worth individuals, as it can free up money to reinvest elsewhere. A clear exit strategy for paying back the loan amount will need to be supplied to a lender for this type of mortgage. - Your LTV and deposit amount
Typically, the more you put down on a house as a deposit, the more likely you are to secure a favourable mortgage rate. This is because lenders won’t have to lend so much money and may view you as more affluent. - Remember the extra fees
There may be an arrangement fee to secure your mortgage, as well as other fees relating to the buying and selling of property, such as conveyancing fees. These should be taken into account when considering the overall cost of buying a property and securing a mortgage.
Ready to take the plunge and buy a luxury property?
Agentis are here to help. We’ve supported many high-net-worth individuals with their property purchases, finding lenders and loans that work for them. Book your free initial consultation with one of our specialist brokers today.
