In the last year, the number of £1m-plus mortgages granted by the major mortgage lenders has jumped by nearly a fifth, while one in 14 borrowers now have mortgages of more than £500,000, according to figures obtained by the Guardian. NatWest revealed it granted 233 mortgages of more than £1m in 2014 and in 2015 it has issued another 207.
While Nationwide building society said it has 269 customers who have taken out mortgages of more than £1m, compared with 167 a year ago. With interest rates at an historic low, £1million mortgages have become more affordable for high earners – who are still required to go through the same affordability checks before they are granted a loan.
But while average earners have, since the financial crisis, been forced to take out repayment mortgages, the wealthy tend to be offered low-cost, interest-only deals, with privately negotiated rates. Consequently, the super-rich prefer to borrow against their home and use the cash for other luxury assets such as private jets, yachts or investment in hedge funds. The supersize mortgage market is split into two – the international elite using private banks and more domestic British buyers in the £1m – £3m market who use the conventional high street banks.