Large Mortgage Based on Share Portfolio Dividend Income

Navigating the mortgage market with substantial assets but unconventional income streams can present unique challenges.

This case highlights how a strategic loan structure, and in-depth knowledge of lender calculations, allowed our high-net-worth client to secure an excellent rate for a £1.8 million property in Cheltenham.

The Scenario

Our client was in the process of buying a five-bedroom property valued at £1.8 million.

As a former business owner who remained on the board having recently sold his company, he anticipated a dividend income of £250,000 per year. However, because he had not yet received this income, there was no proof of earnings to support his mortgage application.

Our client did, however, have £5 million in investments, which presented an alternative way to structure the loan.

The Solution

Initially, two private banks expressed interest in the deal – with such a large share portfolio they were keen to offer terms as it would also open the door to discussions around asset management, risk policies, tax advice, and more.

However, we ultimately chose a building society that could offer a more advantageous calculation of his investment portfolio.

While most lenders would estimate his annual income at 5% of the portfolio value (equating in this case to £250,000), the building society we identified applied a different calculation.

This increased figure gave him more borrowing power and flexibility.

And to further help our client save significantly on interest costs, we advised him to borrow precisely £999,999—just under the threshold that allowed for a reduced rate at 55% LTV or below. This advice ensured he achieved the best possible rate and terms, something he may not have realised had he been arranging this independently.

The case demonstrates how, in complex financial situations, the choice of lender and detailed knowledge of underwriting practices can have a significant impact.

If you have substantial assets but unconventional income or complex requirements, we can help you explore creative financing solutions to make the most of your resources.