High Net Worth Mortgage

What can I borrow and what deposit is needed as a high net worth individual?

What you can borrow is dictated by the lender and their affordability calculations, the same as for anyone else.

Lenders do an affordability assessment, but often with high net worth individuals they can push the affordability higher. Clients in this space often have different levers to help pay the bills, and they get some leniency around income multiples.

You do tend to need a slightly higher deposit, although that also depends on the lender. We do work with some that accept 5%. We ‘ve had one client borrowing £5 million with just a 5% deposit – the key is to have a strong income to support it.

As you can imagine, that lender also made sure that the client’s credit was solid to give them extra confidence. But this isn’t typically high street lenders – these are specialist banks. They can offer very good rates, in fact – they are quite competitive, but not very widely used.

Do high net worth individuals need life insurance?

Technically no, because some people just aren’t eligible for life insurance. You might have personal health issues that prevent you from getting cover in place.

However, we always strongly advise looking at this. Quite regularly, people’s incomes come from their own businesses, in which case there might be more tax-effective ways of getting personal insurance in place.

How does remortgaging work as a high net worth individual?

It’s along the same lines as a normal remortgage situation. We would look to the current lender and also to the rest of the market. Just like when you’re making a purchase, we still need to look at affordability and criteria across the market. Are we using unusual income that needs to go a certain way?

When you’re looking at high borrowing, the difference in rates and fees make a pretty big impact on the total cost of a deal, so getting advice is important to find the most appropriate option for you.

One difference is that we spend more time looking at the income than in the normal remortgage process, especially if that’s not just a basic salary. We’ll be looking into a client’s assets because we may be able to use those. We might use a pension – you might not be drawing anything down, but that pension value can still be used towards affordability.

We look more widely at the overall picture outside the norm of employed roles, contracts or self-employed businesses.

Can I get a Buy to Let mortgage as a high net worth individual?

There are a number of differences with high net worth here. Sometimes, for example, when the rental expectations don’t quite stack up, high net worth individuals can use second home mortgages or other personal income to help make the lending stack up when normal rental wouldn’t.

You might have one or two properties or a whole portfolio. We would look at how to leverage those in the right way. The income and assets behind the individual gives lenders confidence to be more flexible – and that can make quite a significant difference.

The properties can be quite different as well. Often it’s not just a three-bed semi in Bristol. If you’re looking at borrowing over a million, there are so many options. We’ve seen some amazing homes built on the side of cliffs, which is definitely not for every lender. We would really want to know all the details about the property.

There still has to be that business mindset, though. Is it creating good profit? Why else would you want that property as a Buy to Let? There’s just some extra due diligence for lenders to do.

What if I have bad credit as a high net worth individual?

Just as with anybody with bad credit, we would want to look at the credit files and understand what a lender is seeing, to make sure it fits with where we’re going.

Rightly or wrongly, you probably get extra leeway as a high net worth client borrowing over a million. Lenders would take a more holistic view of the situation, especially private banks.

They are less ‘computer says no’ – they look at the whole situation. Bad credit is still going to have an impact, but there may be a few levers we can pull to help on that front.

How can a mortgage broker help a high net worth individual?

If you just approach a high street lender, there is a good chance it’s not going to work. A mortgage advisor that doesn’t understand the high net worth area might not know that the most suitable lenders aren’t on the sourcing system. So getting the right mortgage broker is important.

We know which lenders to work with and, crucially, how to work with them. If you’re giving a very limited story to them, they’ll be quick to say no. They don’t want to take a risk on high levels of money.

But if we do our job right and we get the correct information, we can tell the story to give lenders confidence. They’ll make their mind up pretty quickly on whether it’s one they want to entertain.

We’ve met clients before who have tried a certain lender – but we would never even approach that one. We know how to package you up and present you correctly, setting you off on the right foot.

YOUR HOME / PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

YOU MAY HAVE TO PAY AN EARLY REPAYMENT CHARGE TO YOUR EXISTING LENDER IF YOU REMORTGAGE.

NOT ALL BUY TO LET MORTGAGES ARE REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.