Standard loans typically cover properties up to £500,000 maximum, with an upward cap of up to £1 million in some high-cost areas like London.

If you want to buy a multi-million pound property then standard loans are not going to be enough. That’s where high value loan mortgages come into play.

They do, however, work similarly to standard mortgages. You’ll still want to go to high value mortgage brokers to compare lender offers and select the best offer for your circumstances. You’ll still need to pay back the high value mortgage rates (interest and principal).

High value loans found by high value mortgage brokers are for those who wish to purchase a multi-million-pound property. They themselves will have a high income, be in the higher tax bracket, and will have either large savings or large income streams.

With that in mind, those who take out high value loan mortgages are usually:

1. Wealthy individuals and professionals: You can use this mortgage to buy your primary, secondary or vacation property.
2. Buy-to-let investors: If you plan on purchasing a large HMO, apartment building, or luxury rental you may be able to use this mortgage to finance the purchase.
3. Business owners: Business owners and entrepreneurs can use this loan to buy a property, even if they have irregular income streams
4. Foreign buyers: this type of loan is regularly used by foreign investors and buyers to purchase property in key cities around the world.

The affordability checks that high value mortgage lenders use are stricter than standard mortgages. To get a high value mortgage you will need:

1. Substantial income: The 4.5x income loan cap is often still used for high value mortgages.
2. Strong credit score: You’ll need a significant credit score and history.
3. Stable financial history: You’ll need to prove your financial history has remained stable or growing for the past few years.
4. Lower debt-to-income (DTIs): You’ll need an even lower debt-to-income ratio in comparison to standard residential mortgages.
5. Larger deposit: You’ll usually need to pay a larger deposit, usually between 20 to 40% of the property cost.

Naturally there are higher costs associated with a high value mortgage. That’s why using independent high value mortgage brokers can help. Have your high value mortgage broker collect a range of offers from lenders throughout the UK so you can compare not just interest rates but terms.

With the help of your high value mortgages broker, you can better manage the costs associated with a high value property purchase and mortgage:

1. Deposit: Expect to pay hundreds of thousands or even millions for the deposit, depending on the cost of the property.
2. Interest rate: If the mortgage you need is less than £5million and you pass the affordability checks, you should be able to qualify for a High St interest rate at 1.5% or less. Otherwise, rates range between 2, 2.75 and 3.25%, depending on how much you borrow, and the loan to valuation ratio.

You may be able to swap to interest only payments with a high value loan, though you will need to find a lender who agrees. There are also caps. You may only be able to get interest only coverage for 50% of your loan. With specialist lenders, however, the LTV may go up to 75% or 90%. All of this, however, depends on your personal circumstances, the lenders, and the current market.