With the housing market showing strong signs of recovery, especially in London and the South, the number of homeowners taking out mortgages in excess of £500,00 is increasing.

In the past, borrowers with these mega mortgages have had a mixed reception from the lenders – they were pleased to provide the facility but they looked on them as a higher risk. For that reason they were typically charged a premium rate of interest. But no longer. The table has turned.

Mega mortgages have joined the mainstream and lenders are competing hard for the business. Instead of paying a premium, borrowers are being offered about a quarter of a percent less than comparable deals for more normal sized mortgages. This is because interest rates remain low and because lenders are increasingly basing their lending decisions on the borrowers ability to afford the repayments rather than simply the security provided by the property.

If you want a mega mortgage you’ll find that the banks will generally be the most welcoming. They tend to set higher lending limits than the building societies and other mortgage lenders. Some lenders restrict the amount they’ll lend against an individual property whereas many of the smaller lenders set a cap at £500,000. But perhaps the best way of sourcing a really competitive mega mortgage is to go through a specialist mortgage broker. Any broker worth their salt will be able to source a great deal on six and seven figure mortgages.

For example, the Halifax has a 4.49% fixed rate for a two years on loans up to £2 million. They’ll lend up to 90% of the property’s value and the arrangement fee is just £499. If you’ve got at least 25% deposit then there are several deals around at 3.99% again for a two year fix with a fee of just a quarter of a percent.

Latest House Market Facts

House prices rise 0.5% during March driven by buoyant London market.

This is the fourth successive month of growth in house prices. It is also the highest monthly rise since the summer of 2004.

Over the last 12 months house prices have risen by +0.1%.

The national average house price now stands at £162,500.

In March London prices grew by 1.1%

The performance of the London market is a result of a number of factors:
A shortage of new housing coming onto the London market and the city has underperformed in terms of house price growth over the last few years. This in turn has meant that incomes and house prices in the capital are more closely aligned than in other regions.

In contrast, levels of affordability remain stretched across much of the country.

At a local level away from the capital, prices have picked up – mainly in cities in the South of England. Cities in the North of the country saw slower price growth, with Liverpool, Manchester, and Newcastle all reporting growth of just 0.1%.

Other parts of the country where prices have picked up over the month include Berkshire (0.7%) and East Sussex (0.6%).

The under-performing counties this month are Derbyshire (-0.1%) and the Isle of Wight (-0.1%).

The areas reporting the highest rises in March are all across London: Central London & City (1.9%), East London (1.4%), North London (1.2%), West London (1.2%), South-West London (1.0%) and South-East London (0.8%).

More Mortgage FAQ’s
More Mortgage Articles

Technocrati Tags[mortgages]