Mortgage Rates on Luxury UK Homes

Investing in a luxury property will, inevitably, carry a certain outlay expense. Here we discover how the value of your home impacts your mortgage rates and how to ensure you get a competitive, viable mortgage deal.

About your mortgage

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Based on your yearly income, you may be able to borrow:

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Most lenders will let you borrow 4.5 times your annual salary so, as long as you have a standard 10% deposit, you should be able to borrow this much.

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Depending on your personal circumstances, some lenders may let you borrow 5 times your salary.

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Lenders usually cap the amount they lend at 5.5 times your salary, so it’s unlikely you’ll be able to borrow more than this.

This calculator is an estimation of how much you could borrow. If you’re ready to take out a mortgage, speak to a Revolution brokers to see what options are available.

Mortgage Rates on Luxury UK Homes

If you're looking to buy your dream property, or self-build the home you have always imagined living in, the cost of your borrowing is going to be a serious consideration!

The Revolution team has created this guide to explain what factors will make a difference in getting the mortgage you need - on even the grandest of UK properties - and how to improve your chances of approval.

Should you need help finding a mortgage for a luxury home, give us a ring on 0330 304 3040, or send a message to info@revolutionbrokers.co.uk and we'll get to work!

How Difficult is it to Mortgage a Luxury Property?

It really depends. Mortgage lenders might define a luxury property in different ways, although will generally refer to a home as higher-end if it costs over £500,000.

That might include castles, high-value cottages, farmhouses, stately homes, listed buildings or townhouses in prestigious locations.

The location makes a big difference, as the same budget that might buy a flat in London might buy a substantial family home elsewhere.

Typically, if you have the finances to prove affordability, and have a decent deposit, it isn't complicated to find competitive lending. However, if the property is non-standard or you require a substantial mortgage value, it might be a little trickier.

  • Mansion mortgages - the key is to prove affordability and to meet the lender's eligibility criteria as closely as possible.
  • Stately home mortgages include properties built for the aristocracy. Typically, this type of home will be listed and non-standard construction, so specialist lending is almost always required.
  • High net worth mortgages offer better rates, more flexible terms, and higher value mortgages than you will find on the high street or through a regular bank. This type of mortgage is essential for substantial mortgage values.

Can I Get a Self-Build Mortgage to Build a Luxury Property?

Self-build mortgages can be complex, and in many cases, a bridging finance loan is the fastest option available. However, the interest costs and length of borrowing are a crucial consideration.

Options include:

  • Self-build mortgages - although lending is often capped and may not be sufficient to cover the whole of the build. Usually, you will draw down funds in tranches and pay higher interest than a residential mortgage.
  • Bridging loans are usually more flexible, and faster to secure, and could be an alternative if you do not qualify for a self-build mortgage.

What Factors Will Determine Whether I am Approved for a Luxury Home Mortgage?

There are many factors at play, and if you need a mortgage for a high value, lenders will be careful to assess every aspect of the mortgage application thoroughly.

  • Construction type - many luxury homes are non-standard, and therefore present a greater lending risk. This assessment will depend on the age, type and location of the property as well as any historical importance.
  • Loan to Value ratio - the higher the value you wish to borrow as a proportion of the total purchase cost, the higher the risk. Most residential mortgages will go up to 95% of the value, although 85% or 90% are more typical. A lender is more likely to require a 15% or 20% deposit on high-value properties as a minimum.
  • Affordability - on a more extensive mortgage application, a lender will need to carefully assess affordability to ensure you can keep up with the repayments. Usual mortgage calculations offer up to 4.5 times your annual income, with five or six times earnings available in some circumstances. The lender will also need information about the anticipated costs of renovation works to build into the affordability assessment.
  • Age - higher age borrowers are also an additional risk, and some lenders place a maximum age cap on applicants they will approve. Some specialist providers have no age caps, so it's vital to work with an independent broker who can recommend the most suitable lenders.
  • Credit rating - if you need a more extensive value mortgage, any issues with adverse credit may cause a problem. You can achieve a mortgage even with a bad credit history by applying to a specialist bad credit lender in some cases.

Expert Advice with Luxury Home Mortgages

When borrowing a significant amount of money, the term and rates are critical to ensure you do not pay over the odds. The business finance broker team has years of experience negotiating complex mortgages in many circumstances, offering independent whole-of-market advice.

Contact the team today on 0330 304 3040 or email us at info@revolutionbrokers.co.uk to get started with an enquiry.

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FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature. We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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