8.2 Times Income Mortgage for HNW Client

PARTNER

Chris Lloyd

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Key Facts:

• Client: British National & Resident 
• Property type: Residential property
• Property Value: £2,075,000
• Loan Amount: £1,037,000
• LTV: 50%
• Rate: 2.39%, 2-year fixed 

Here at Enness, we have a market-leading reputation when it comes to the complex parts of the mortgage market. In this case, we were approached by a client who was looking for a mortgage that was 8.2 times his income. 

For most of the market, lenders will only offer a maximum of 4.5 times a borrower’s income. Recently, some lenders have raised this to 5 or 5.5 times a borrower’s income, although this tends to be in exceptional cases for individuals who have higher salaries. Lenders base the 4.5 times your salary calculation on what they believe most borrowers can comfortably afford in terms of repayments and limiting risk for all parties. 

For high-net-worth individuals, there is more flexibility around what you can borrow, often with less emphasis on specific multiples of your income, provided the mortgage is clearly affordable. High-net-worth mortgages are available to anyone with an income of more than £300,000 or assets of more than £3 million (excluding the value of your principal residence). Here, we were able to get the lender to take a view that he could draw down his equity share in the company (worth £3m) at any time to help make the monthly payments if needed, which is something most lenders wouldn't be able to take into account. What is more, we were also able to do the loan on full interest-only. 

If you are eligible for a high-net-worth mortgage, you effectively opt-out of regulated oversight, which means lenders have much more flexibility in what they can offer you, affordability and so on. These mortgages are advantageous if you have significant wealth but comparatively little income, global assets, multiple income streams and so on. Overall, a high-net-worth mortgage makes it easier to borrow more based on your global wealth rather than your income in exclusivity.  

Here at Enness, we can use pre-paid and rolled up interest methods, interest deposits, short trading history, one year's accounts or one year's tax returns and even very high loan to value mortgages for complex income types. To discuss your mortgage scenario, get in touch today.