A seven-figure mortgage isn’t just a route to owning a valuable home. For those who can afford to borrow this sum, it’s possible to put the money to use in hard-working investments, or even strategically reduce your inheritance tax bill.
Mortgages of more than £1m are becoming increasingly common, particularly for those purchasing property in London and the South East, where around 700,000 properties – or one in 45 homes – are worth more than £1m, according to Savills.
“As more homes cross the £1m threshold, more ordinary purchases and refinances at 60-75pc loan-to-value land in seven figures. A £1m mortgage on a £1.5m family house in Wandsworth or Surrey is no longer an extravagant transaction,” said Islay Robinson, the chief executive of Enness Global, which brokers mortgages for high-net-worth (HNW) borrowers.
“Lenders have become more willing to provide large mortgages through dedicated underwriting teams,” he added.
We’ve spoken to industry experts to find out how the super-rich are using their lending to protect and grow their wealth, and what you can learn from them.
How common are £1m+ mortgages?
As house prices have risen over recent years, so have seven-figure mortgages. There were 13,930 of these loans sold in 2025, up 25pc from 11,145 in 2023, according to product sales data from the Financial Conduct Authority.
To achieve this level of borrowing, you’d previously have needed to engage the services of a private bank. But this is no longer the case.
“The market has changed significantly now and most of the mortgages I arrange are high-value mortgages through mainstream or high street lenders, rather than private banks,” said Adrian Anderson of mortgage broker Anderson Harris.
While many high street banks previously capped their lending at £750,000, lenders such as Halifax and Santander will now go to £1m, and even more.
Rather than the overall figure, the number that they really care about is the loan-to-value ratio – that is, how much you’re investing compared with how much you’re borrowing.
John Everest, the director of Everest Mortgage Services, said: “Some lenders will consider lending up to 85pc loan-to-value, while others may restrict larger mortgages to 75pc loan-to-value.
“Private banks can have their place, particularly where somebody has more complicated income arrangements, significant assets or a more unusual financial situation. But just because somebody is borrowing £1m or £2m doesn’t automatically mean they need to use a private bank.”
The advantages of seven-figure lending
Leveraging lending rates
Borrowing against a primary residence is one of the cheapest forms of borrowing, and many wealthy individuals take advantage of this to fund their investments elsewhere.
“Many HNWs I have met do not want to own their home outright, and have money tied up in a property, as they do not find this an efficient use of capital,” explained Mr Robinson.
“[Money] tied up in a home is illiquid and earns nothing. If a borrower can fund a mortgage at a rate below what their capital is doing elsewhere – whether in a business, an investment portfolio or other property – it can make sense to borrow against the house and keep the capital working.”
Mr Everest has also seen this pattern of behaviour. “They might invest in their own businesses or investments, such as an S&P 500 fund, which has historically delivered returns of around 10pc per annum over the long term,” he said. “If they’re paying mortgage interest of around 4.5-5pc, they may feel their money is better invested elsewhere.”
Inheritance tax benefits
There are potential inheritance tax advantages to taking out a seven-figure mortgage on your property, particularly if you want to stay living in your family home.
“Someone with a valuable family home could borrow £1m against it and gift that money to their children. If they survive seven years, the gift will normally fall outside their estate, potentially reducing their inheritance tax liability significantly,” said Rakhee Wood, of Butterfly Financial Planning. “The potential tax saving could be as much as 40pc, or possibly 60pc if the residence nil-rate band (RNRB) comes back into play and the relevant conditions are met.”
There are some important caveats, however. “My biggest consideration is the cost. At 6pc interest, a £1m interest-only mortgage would cost £60,000 a year. Over seven years, that’s £420,000 in interest alone, which could substantially erode any inheritance tax saving, with the original £1m still outstanding,” said Ms Wood.
Whether this is a sensible tactic would “depend on the size of the estate, the available inheritance tax allowances, whether the RNRB applies and whether the outstanding mortgage qualifies as a deductible liability”, Ms Wood added. There is also the risk that you could die within the seven years, in which case the gift would remain in your estate, or that interest rates rise considerably.
This strategy is only worth pursuing if you have a large estate and expect a significant inheritance tax bill, in which case you should seek specialist advice.
Assuming you’re taking these estate planning steps later in life, you’ll also need to afford mortgage repayments throughout your retirement.
A more flexible way of accessing cash
While there’s a small charge and some effort involved in taking out a mortgage, it can still be a more flexible way of accessing cash than liquidating other long-term assets.
“Many HNW buyers may have other assets and investments; however, they are not often that ‘liquid’,” said Mr Robinson. “While on paper they have the ‘wealth’, it is not always that accessible – or there may be costs involved to cash in investments, hence borrowing against your home is convenient.”
The disadvantages
Even small rate increases are expensive
While the mortgage rates for seven-figure loans are similar to “standard” mortgage lending, because the amount you are borrowing is significantly more, even a small increase in the interest rate can have a big effect on your repayments.
Mr Everest uses the example of a 25-year capital-repayment mortgage with an initial rate of 5pc, showing how much monthly repayments can quickly stack up.
On a £2m mortgage, a 1pc increase equates to more than £1,200 extra a month, or £14,500 a year. “That’s a substantial increase, even for a high-net-worth household. It also highlights why reviewing mortgage arrangements and securing competitive rates is so important. Even a relatively small difference in the interest rate can amount to thousands of pounds over the mortgage term,” said Mr Everest.
You could put your home at risk
The biggest risk you must always remember is – like all mortgages – anything you borrow is secured against your home. If you cannot keep up with the repayments, it could be repossessed.