Summary:

There's an increasing number of homes costing more than £1m. When it comes to a mortgage deal, they're not necessarily getting the best deal.

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securing a mortgage. The vast majority of lenders would prefer to lend a higher number of mortgages at a lower value than a massive one of around £2 to £3 million pounds because of the risks involved.

Banks will lend as much a £500,000 on standard mortgage deals, but beyond this there will normally be an increase in arrangement charges or a rise in their rates. Smaller building societies ( medical insurance ) tend to have lower limits and often the most you can borrow is between £250,000 and £350,000. Unfortunately it is often these lenders that offer the best rates! Their marketing methods are aimed at the lower end of the mortgage market. They may offer really competitive rates but the amount of money available is limited and so therefore is the amount homebuyers can borrow.

There is some good news, however. Several lenders have increased their top ( insurance ) figures on loan sizes, many of them to around £1m. The Woolwich has gone further than this. In the past there used to be a fee of 0.5% for borrowing in excess of £1m at its standard rate, but that has been increased to £2m.

The Portman and Coventry building societies have raised their ( personal loans ) limits from £500,000 to £1m and £750,000, respectively, although as the Portman charges a higher fee on loans of over £500,000 (0.6%) it is not as competitive.

The Bank of Scotland is offering a choice for the larger loan customer. There are two trackers available for loans above £500,000. The first one is 0.21 ( home insurance ) percentage points below the basic rate for two years, offering a rate of 4.29%. There is a 0.1% fee and a 10% deposit is needed. The ceiling on the loan is £2m. This offer is only available via a broker.

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