As the availability of mortgage funding has tightened in recent years, lenders have increasingly restricted the maximum mortgage level. Some of the sharper deals on the market are still limited to only £250,000 and many have capped their maximum mortgage at around £1million.
With higher rates also being imposed on supersized mortgages, private banks have taken advantage and been well placed to more than compete, both on criteria and rate. They can generally offer a bespoke package, priced according to the client’s overall position, although often dependent on them moving other assets or banking to the bank. They can also be more flexible in their criteria, which can be useful where income is made up from different and complicated sources.
However, there have been recent signs that the big high street names are turning their focus back to the large loan sector. Nationwide BS has opened up some of its standard rates up to 75% of the property value and to a maximum of £2million. It will also consider larger mortgages up to 70% loan to value on a case by case basis.
This follows product launches aimed squarely at mortgages in excess of £1million by other lenders such as Santander and Accord Mortgages. This improved focus on the large loan sector should be good news for borrowers. As more lenders look to improve their competitive position it should help to broaden the options for those requiring larger mortgage loans, helping to drive down price and improve criteria in the longer term.