Million pound mortgages

Why million pound cases are different

Three reasons. First, fewer lenders compete, which changes pricing dynamics. Second, underwriting is genuinely individual, not a tick-box; the banker reads the case rather than running it through a calculator. Third, documentation is heavier (proof of source of wealth, source of funds, deeper income packs, anti-money-laundering on every related party). Done well, the rate is often sharper than a comparable smaller loan; done badly, the case stalls.

Private banks at this level

Private banks become competitive at £1m plus, especially when assets under management (AUM) come into the conversation. The price improvement against a "no AUM" loan can be meaningful on a large loan, although it varies between banks and depends on the wider relationship. Whether to bring AUM in is a wealth decision as much as a borrowing one; we model both routes.

Large-loan specialist banks

A handful of specialist banks compete on rate without an AUM requirement, in exchange for slightly tighter pricing than a private bank with full AUM. For clients who do not want a wealth relationship attached, this is often the right home for the case.

Worked example, £1.8m residential mortgage

City executive, base £200,000 plus £180,000 contractual bonus plus RSU vesting at £100,000 a year. Buying a £3m home with a £1.2m deposit (40% LTV), mortgage £1.8m. Quote 1: high-street large-loan team, base plus 50% bonus only, decline at this loan size. Quote 2: large-loan specialist bank, full income recognition, rate 4.55% on a 5-year fix, no AUM required, £3,000 product fee. Quote 3: private bank with £1m AUM, rate 4.20% on the same 5-year fix, no product fee. Over the 5-year fix the private bank saves around £31,500 in interest plus the £3,000 product fee, £34,500 of pricing improvement. The trade is the AUM relationship; whether the wealth-management terms work is a separate conversation we model openly.

Income at this level

Mostly bonus, RSU (Restricted Stock Units), partnership profit, deferred compensation or company dividends. The right lender at this level is comfortable with all of those and counts them at face value, not the high-street defaults of 50% bonus, 0% RSU. The borrowing figure on the right lender is often 30% to 70% higher than the high-street default.

Timeline and process

Six to ten weeks from instruction to offer is normal at this level, sometimes longer if there are offshore or trust structures. The relationship director owns the case throughout; that is part of the value at this end of the market.

Common pitfalls we see

Going to your existing high-street bank first because the relationship is familiar; large-loan teams at high-street banks often quote at standard underwriting and miss what specialist banks would do. Underestimating the documentation lead time on offshore structures or trust ownership. Bringing AUM into the conversation late, after the bank has already priced without it. Forgetting that interest-only and part-and-part are common at this loan size and the repayment vehicle test still applies.

Buy-to-let warning

If part of your borrowing is buy-to-let or held in an SPV (Special Purpose Vehicle), most buy-to-let mortgages are not regulated by the Financial Conduct Authority. The protections that apply to your residential loan do not all apply to your buy-to-let.