Director Gary Festa says: “Assuming you can find a lender prepared to arrange a loan in excess of £1m – and we are talking about barely a handful – the fees become crippling, even for those with up to 50 per cent loan to value.
“Barclays, traditionally a major player in this high-net-worth mortgage arena, typically imposes a huge £5,000 arrangement fee for a £1m-plus mortgage and adds an extra £5,000 to every extra £1m borrowed. In addition, it increases its rates over the first £1m and again for every additional one.”
Among lenders still offering loans over £1m are Intelligent Finance, which goes up to £5m, and Cheltenham & Gloucester and Royal Bank of Scotland, which have no cap on loan size subject to underwriting.
Nationwide’s cut-off point is £500,000 and Chelsea Building Society offers one product above £500,000 which is only open to buy-to-let customers.
HFM says it will increasingly be private banks that look to step into this end of the market.
Chadney Bulgin mortgage partner Jonathan Clark says: “There are still deals out there but lenders are taking less account of non-guaranteed income-like bonuses which many City workers rely on.”