Mortgages of a million pounds and over are increasing, according to data obtained by The Guardian.
The main lenders have approved almost 20 per cent more mortgages during the last 12 months, while one borrower in 14 has a mortgage of £500,000 or above. In 2014, 233 mortgages were approved by NatWest for £1m or more, while so far in 2015, 207 further mortgages for this amount have been granted.
The Nationwide Building Society has seen a huge increase in the number of clients borrowing more than £1m, with 269 this in comparison with 167 12 months ago. Large mortgages of £1m plus are more affordable for those with a high level of income due to low interest rates. Although high earners are still subjected to affordability checks, they generally have an interest only deal which has a privately negotiated rate of interest. Very often, high earners secure borrowing against their home and use the money to fund luxury purchases like a yacht or a private jet.
High earners with a mortgage of £1m plus are likely to be footballers or bankers, while the average annual income of someone with a mortgage of £1m or over is 389,000. According to Andrew Montlake, of Coreco mortgage brokers, who was speaking to the Guardian, high street lenders are now lending amounts of £1m and over, having regained confidence in the market.
For anyone considering taking out a mortgage, it is advisable to consult with a professionally trained mortgage adviser who has a CeMAP qualification.