How Easy Is It To Secure a Large Mortgage From A Mainstream Lender?

Since the start of the economic downturn way back in 2007, most high street banks and building societies in the UK have tightened their underwriting criteria. There are now far fewer mortgages available with a small deposit and, even for those borrowers with a substantial deposit, lenders still insist on significantly more in the way of evidence of income and outgoings than they did before the credit crunch.
These changes have all been put in place by banks so that they have a more tightly controlled loan book. Another way of controlling their loans has been to limit the maximum amount that they will offer as a mortgage. The cap on large mortgages has been set at anything between £500,000 and £1 million depending on the mainstream lender and some will simply not lend above these imposed limits. This makes it very difficult for borrowers seeking a large mortgage to find one through their local bank, even when they have been a customer for many years.
The situation has not been helped by the high asking prices of homes in London and the South East, which have fuelled the requirement for larger mortgages. Ironically, the property market in these areas is still strong, despite the recession. Finally, however, some mainstream lenders are wakening up to this fact and some will now consider large mortgages for amounts up to £3 million.
Continuing low mortgage rates are clearly attracting more borrowers into the property market in the UK. And as the cost of loans, particularly medium to long term fixed rate deals, has fallen so demand for these products has increased. This is borne out by Council of Mortgage Lenders data showing rises in gross mortgage lending.
80 to 90 per cent of new mortgages are being agreed as a fixed rate deal with approximately 60 per cent of these on 2 year fixed rates in a large part due to the fact that fixed rates are falling. So is it time for those seeking a large mortgage to arrange it through their local bank or are their needs still best served by specialist broker advice and loans from less traditional lenders?
With mainstream lenders targeting the million-pound mortgage market, with rates becoming more and more attractive and affordability criteria becoming less stringent, it seems that banks are, once again trying to attract new mortgage business.
Some high street lenders are taking bold steps away from their conservative approach to lending and offering large mortgage deals but traditionally these banks and building societies have rarely had the underwriting expertise and flexibility needed to help high net worth clients secure the best mortgage deal. Brokers who specialise in million pound mortgages have a far better understanding of the more complicated income arrangements and property ownership issues that typically affect high value mortgage clients. So, while it is encouraging that mainstream lenders are becoming less rigid in their approach to lending HNW individuals are still likely to be better off with a specialist mortgage adviser.
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