High Net Worth Mortgage

How does a high net worth mortgage work and what are my options?

High net worth mortgages are very similar to most of the mortgages you would have had before. The difference is that you might qualify for a high net worth exemption. If you have assets worth £3,000,000 or you have an income over £300,000 per year you might qualify for the lender to take a bit more of a pragmatic approach to the underwriting process. 

They can relax some criteria, increase affordability calculations or multiples of income. It does depend on your personal circumstances, but it generally gives you a bit more flexibility if you fit into that category. Your lender choices are likely to change if you’re a high net worth individual.

Is it more difficult to get a mortgage for high net worth individuals?

It’s arguably a bit easier than with other mortgages, because you’re able to relax some criteria. The lender and underwriter are able to take a bit more of a wider view of the entire client’s profile and not specifically what happened in the last year, for example. It gives us more scope to achieve the lending we need. 

But if a high net worth individual approaches a generic mortgage broker they can only take them to standard high street lenders – and that’s where they might find some difficulty. A standard high street lender will only offer standard pricing or criteria that might not fit your individual needs. So it’s not difficult to find a high net worth mortgage,.you just need to know where to look.

What is considered high net worth?

It’s when you have £3 million of liquid assets – which could be stocks, shares, houses, cars, properties, or an individual income of £300,000. You can’t combine it, so two partners earning £150,000 each would not be high net worth – it’s one individual.

The more assets you’ve got or the higher your income, the more flexibility you will have. If you only just slip into that category, obviously you do qualify but we may need to take a more sensible approach.

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

There’s no one size fits all. If you go to a high street lender there are mortgage products with Loan to Value limits of 65%, 75%, 85% and more, with different income multiples if you’re looking for a residential property. Buy to Lets are obviously priced based on the rental income for the property. 

But if you’re high net worth you could borrow seven or eight times your income because the lender can take a wider view. They can minimise their risk by looking at the background portfolio of assets. You could even borrow 100% Loan to Value if you’ve got other assets that the lender can take a charge against. You could reduce your deposit down to zero for a purchase if you’ve got assets in the background. 

Do high net worth individuals need life insurance?

Everybody needs life insurance. It’s a topic that a lot of people don’t think about much. Maybe we are blissfully ignorant as a population, but people really shy away from this. They don’t want to think about it – it’s too morbid.

But it’s a very important aspect to cover off, particularly if you’ve got a high level of borrowing. You need to ensure that it’s covered for your spouse, for your children, grandchildren and wider family. Without life insurance in place you could risk losing it all to the taxman. So it’s absolutely a topic worth covering.

How can a broker help a high net worth individual?

It’s all about knowing which lenders to go to and how to position the deal. Explaining the client’s circumstances really does dictate the outcome – and even more so with things like this, because there is so much more flexibility. 

How we present the whole case really drives the outcomes, along with knowing which lenders have more flexibility and understanding for a certain situation. If a client has assets globally, not just in the UK, some lenders could look more favourably upon that than others. It’s all about how we position that when we discuss it.

Your home may be repossessed if you do not keep up with your mortgage repayments.