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Mortgages - End of million pound mortgages - 02/06/2008

  
 
  Mortgages in excess of one million pounds have become the latest casualty of the mortgage crisis. High end mortgages were once great earners for lenders and they scrambled to attract these wealthy customers.

However, the majority of lenders are turning away from larger mortgage deals and high end customers have only a handful of lenders to choose from, most of them now private banks.

The simple reason for this move away from lending such large amounts is that the banks just do not have the cash available to lend.

Gary Festa, wealth manager and investment planner at HFS Columbus warns that the fees for taking out and arranging these high value mortgages have become phenomenol.

Barclays, one of the major players in the high value mortgage market has upped its arrangement fee for arranging mortgages over £1 million to £5,000.

On top of that an extra £5,000 is then added to every further million borrowed from this major bank. Interest rates are also staggeringly high with these types of mortgages and get higher with each million borrowed.

The high end of the market just is not an atttractive or viable option for many banks and as a consequence many have withdrawn from this type of lending, leaving just 4 lenders at the very top end of the market willing to approve mortgages of over £5 million.

 
     
 
 
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