07-02-2026
This article is intended for high net worth individuals and finance professionals seeking insight into securing interest-only large mortgages in London. It highlights the unique challenges faced by investment bankers with complex income profiles and demonstrates how bespoke solutions can address these needs. The focus is on high-value, interest-only mortgages for investment bankers in London, providing a comprehensive overview of the unique hurdles and tailored strategies required for successful financing.
Introduction
In early 2026, Fox Davidson secured a £7,000,000 interest-only mortgage for a senior investment banker purchasing a family home in one of London’s most prestigious postcodes. This case study details how Fox Davidson secured a £7,000,000 interest-only mortgage for a London investment banker in 2026. The client’s international business interests played a significant role in shaping the property financing strategy, as business activities and structures can impact mortgage options and wealth management for high-net-worth individuals.
This article explores how we navigated complex income structures, cross-border tax considerations, and conservative lender appetites to deliver a bespoke private bank solution. Many high net worth individuals are non-UK nationals and may have income subject to international tax considerations.
Private banks and specialist lenders are often preferred by high net worth individuals due to their understanding of complex income structures.
Fox Davidson a a high net worth mortgage brokerage with offices in Knightsbridge.
Key Takeaways
- In 2026, Fox Davidson secured a £7,000,000 interest only mortgage at 80% loan to value for a London-based investment banker purchasing an £8,750,000 family home in Kensington.
- The client had a relatively modest base salary of £375,000 but highly variable income paid in both US dollars and GBP, comprising bonus income, carried interest distributions, and restricted stock units.
- We arranged a bespoke private bank solution using both base and historic variable income, with a 10-year interest-only term and capacity for substantial annual overpayments without penalty.
- Fox Davidson, as award-winning UK residential mortgage brokers, coordinated currency, tax, and affordability considerations to secure credit-committee approval within six weeks.
- High net worth clients with complex or international income profiles are invited to contact Fox Davidson for tailored, large-loan residential finance across London and the Home Counties.
The Story
Client Profile
Central London in 2026 remains one of the most sought-after property markets globally. Despite interest rates stabilising around 4-4.5% following Bank of England adjustments, super-prime residential properties in areas like Kensington, Chelsea, and Belgravia continue to attract domestic and international buyers willing to pay premium prices for the right home. Yet even for high earning bankers with seven-figure compensation packages, securing appropriate mortgage funding can prove surprisingly difficult.
Our client was a 42-year-old Managing Director at a global investment bank, relocating his young family from a rented apartment in the City to a five-bedroom Victorian townhouse in Kensington, London SW7.
We have years of expertise in placing mortgages for investment bankers.
Property Details
The purchase price stood at £8,750,000—a property featuring the classic white stucco facade, ornate iron railings, and high-ceilinged reception rooms that define this prestigious neighbourhood.
Representative property style: Kensington period townhouse
Initial Lender Response
What made this case particularly complex was the client’s income structure and nationality. As a US citizen with UK resident status, he was paid predominantly in US dollars, with compensation flowing from both London and New York entities. High net worth individuals often have access to a wider range of mortgage options compared to other UK mortgage customers due to their financial profiles. His income comprised a £375,000 base salary, annual bonuses that varied significantly year-to-year, carried interest distributions from several private equity funds he had invested in during his career, and restricted stock units vesting over a 3-5 year schedule. In addition, companies and corporate entities are often used in structuring high-value property transactions for clients like this, providing flexibility and privacy.
When the client initially approached a high street bank in late 2025, he was declined. The lender cited concerns about the mix of foreign currency income, the volatility of annual bonuses, and the requested high loan to value. Despite earning well in excess of £750,000 in total compensation most years, the bank’s automated underwriting simply could not accommodate his profile.
Fox Davidson were introduced by the client’s London-based private wealth adviser, who knew of our track record with complex, high-value UK residential mortgages for senior finance professionals. From our first conversation, it was clear this case would require a targeted approach to lender selection and a carefully structured credit submission.
The Challenge
Client Objectives
This case presented multiple layers of complexity that most lenders in 2026 are either unwilling or unable to accommodate. The client needed to borrow £7,000,000 on an interest only basis at approximately 80% LTV, while maintaining over £1,000,000 in liquid assets for continued investment in global markets. He also required flexibility to make lump-sum repayments from bonus income and carried interest without incurring penalties.
- Purchase price: £8,750,000 for a primary residence in Kensington
- Required loan: £7,000,000 on an interest-only basis (targeting approximately 80% LTV)
- Liquidity preference: Desire to keep £1,000,000+ of liquid assets invested in global markets rather than using them for a larger deposit
- Repayment flexibility: Flexibility to make substantial lump-sum repayments from annual bonuses and carried interest distributions
Income and Tax Complexity
The client’s compensation structure posed significant challenges for standard lender affordability models:
- Primary income currency: Majority of compensation paid in US dollars, with payments originating from both London and New York entities
- Remuneration structure: Layered remuneration comprising base salary, discretionary cash bonus, carried interest from multiple private equity investments, and stock incentives vesting over 3-5 years
- Tax obligations: Ongoing US tax filing obligations as a US citizen, with potential additional liabilities affecting net disposable income under FATCA regulations
Lender Concerns in 2026
The post-2023 regulatory environment has prompted more conservative stress-testing on large interest-only loans. Most lenders we approached expressed specific concerns:
- LTV appetite: Limited appetite from mainstream banks for greater than 75% LTV on interest-only products above £5m
- Exit strategy: Need for a clear exit strategy and evidence that interest-only remained prudent given the client’s age and wealth profile
- Income treatment: Uncertainty about how to treat carried interest and RSUs, which some institutions viewed as speculative income
Challenge Factor | Detail |
|---|---|
Loan Size | £7,000,000 |
Target LTV | 80% |
Primary Income Currency | US Dollars |
Income Type | Base + Bonus + Carried Interest + RSUs |
Nationality | US Citizen, UK Resident |
Property Type | Residential townhouse, Kensington SW7 |
Some lenders would only consider the base salary or apply a heavily discounted proportion of bonus and carried interest to their affordability calculations. This initially produced an “insufficient affordability” outcome despite the client’s substantial total compensation and personal assets worth in excess of £6,000,000.
Our Approach
Detailed Fact-Find and Documentation
From our Knightsbridge offices in London, Fox Davidson specialise in structuring large, complex residential mortgages for high net worth clients whose circumstances fall outside standard lending policy. We work extensively with senior professionals in investment banking, private equity, hedge funds, and related fields where income structures rarely fit neatly into mainstream lender criteria. For these clients, we arrange a range of financial facilities, including investment facilities, bridging finance, and bespoke buy-to-let property finance, tailored to meet complex requirements.
When structuring mortgages, it is crucial to understand and negotiate the fees associated with mortgage and lending services, as private banks and lenders may offer flexibility on fees to attract high-value clients.
Additionally, the ability to negotiate mortgage terms is often greater with private banks compared to high street lenders, which can be particularly beneficial for high net worth individuals.
We began by completing a comprehensive fact-find that went far beyond a standard mortgage application:
- Compensation documentation: Collated three years of compensation statements from the investment bank, including P60s, bonus letters, and carried interest schedules from the client’s fund investments
- Bonus and carried interest history: Reviewed historic bonus and carried interest payments from 2021, 2022, and 2023 to demonstrate consistency and establish a reliable average
- Tax evidence: Obtained tax returns and accountant’s letters covering both UK and US tax liabilities to present an accurate net income figure after all obligations
- Asset documentation: Documented the client’s liquid investment portfolio, pension assets, and vested stock holdings to evidence overall wealth
Lender Selection Process
Based on our analysis, we ruled out most high street banks early in the process due to policy caps on LTV and limited recognition of USD income or carried interest. Instead, we focused on:
- Private bank shortlist: A shortlist of UK private banks and international lenders active in the super-prime London market
- Multi-currency experience: Institutions with demonstrated experience in multi-currency income and US national borrowers
- Bespoke structures: Lenders offering bespoke interest only structures for loans above £5m with flexible terms
Private banks often lend money to super-rich clients at lower rates than high street banks due to their complex financial profiles. In some cases, clients may be able to secure financing below published rates through negotiation or special arrangements.
Presentation to the Chosen Private Bank
We prepared a comprehensive credit submission for our selected private bank partner, highlighting:
- Net worth: Total net worth including liquid investments, pensions, and vested stock worth in excess of £6,000,000
- Income forecasts: Conservative forecasts of future income, stress-tested against FX movements (USD/GBP depreciation scenarios) and reduced bonus outcomes
- Exit strategy: A clear exit strategy combining partial repayment from maturing fund distributions, equity release potential on another London property, and anticipated vesting stock over the next 7-10 years
London’s financial district, home to many of our investment banking clients
We engaged early with the bank’s credit team to secure agreement in principle on the target £7,000,000 loan and 80% LTV before proceeding to valuation and full underwriting. This approach reduced time risk for the client and demonstrated to the vendor that the purchase could complete within the agreed contractual deadline.
The Outcome
Final Mortgage Structure
Fox Davidson secured a £7,000,000 interest only mortgage on the Kensington property on terms that met all of the client’s key objectives. The private bank solution we arranged recognised the full picture of his income and wealth, rather than applying rigid high-street criteria that would have made this transaction impossible.
Term | Detail |
|---|---|
Property Value | £8,750,000 (2026 valuation) |
Loan Amount | £7,000,000 |
Loan-to-Value | 80% |
Product Type | Interest-only residential mortgage |
Initial Rate | Competitive bespoke private bank margin over SONIA |
Term | 10 years interest-only, with option to review and extend |
Term and Repayment Flexibility
The mortgage structure incorporated several features that aligned with the client’s income cycle and financial planning:
- Interest-only term: 10-year interest only term with the option to review and extend subject to status at that point
- Overpayment flexibility: Right to make up to 20% capital overpayment per year from bonus and carried interest, with no early repayment charges within that allowance
- Repayment conversion: Option to convert part of the balance to a repayment basis later if the client’s circumstances or preferences change
Resolving Lender Risk Concerns
The private bank’s credit committee approved the application because we addressed their key concerns directly:
- Affordability calculation: Affordability was calculated on a blend of base salary, averaged historic bonus over three years, and a prudent proportion of carried interest with appropriate haircuts applied
- Liquidity post-completion: Post-completion, the client retained over £1,200,000 in liquid investments and cash, comfortably exceeding the bank’s minimum liquidity requirement for borrowers at this LTV
- Exit route: We documented a credible exit route via future fund distributions and anticipated vesting stock over the loan term
Client Benefits Realised
The outcome delivered tangible benefits for our client and his family:
- Timely completion: Completion on the Kensington purchase occurred in early 2026, within the contractual deadline
- Preserved investment capital: The client preserved investment capital, enabling continued participation in new fund launches and co-investments through his firm
- Aligned repayments: Interest-only repayments aligned with his income cycle, with the ability to reduce the balance materially after each bonus year rather than committing to fixed monthly capital repayments
This case demonstrates Fox Davidson’s expertise in negotiating bespoke, large-value residential mortgages for senior professionals with complex, international income profiles that most lenders simply cannot accommodate.
Why Interest-Only Was the Right Fit
An interest-only mortgage is a loan where the borrower pays only the interest for a set period, with the principal due at the end of the term.
An interest-only mortgage allows the borrower to pay only the interest on the loan for a specified period, with the principal remaining untouched until the end of the term. This structure can significantly reduce monthly outgoings and preserve liquidity for investments. However, borrowers must have a robust repayment strategy for the capital, such as asset sales or bonus-backed investments. Lenders require clear evidence of a credible repayment vehicle, which could include liquidation of assets, future windfalls, or downsizing.
The appeal of buying homes in the UK includes the prospect of home price increases and tax advantages.
Interest-only mortgages generally require higher deposits than standard repayment loans.
Many high net worth individuals use borrowed funds from interest-only mortgages to invest in property or other assets, leveraging these loans as a strategic investment tool to maximize returns.
Rationale for This Case
For our investment banking client, interest only was the optimal structure for several interconnected reasons:
- Cash flow predictability: With high but variable income, keeping monthly outgoings predictable allowed for better financial planning. At current rates, monthly interest payments on £7m are approximately £23,000-£26,000, compared with £35,000+ on a capital-and-interest basis.
- Preserving investment capital: The client’s substantial investment portfolio and private equity investments offered realistic, time-bound capital repayment options. Liquidating these assets to fund a larger deposit would have sacrificed returns potentially subject to exceeding the mortgage interest cost.
- Opportunity cost: With the client’s portfolio historically generating returns of 8-12% annually, the opportunity cost of liquidating investments to reduce mortgage borrowing significantly outweighed the cost of interest on the loan.
Risk Management and Stress-Testing
We modelled different interest-rate and FX scenarios to ensure sustainability of interest payments under adverse conditions:
- Payments were stress-tested at rates significantly above the offered rate, in line with 2026 regulatory expectations from the FCA
- USD/GBP exchange rate scenarios were modelled to ensure affordability even if dollar income translated to fewer pounds
- The lender approved interest-only specifically because of demonstrable surplus income and asset-backed exit strategies, not income alone
Comparison: Interest-Only vs Repayment
Table 1: Comparison of Interest-Only and Capital Repayment Mortgages for a £7m Loan at 4.25%
Factor | Interest-Only | Capital Repayment |
|---|---|---|
Monthly Payment (£7m at 4.25%) | c.£24,800 | c.£38,200 |
Cash Flow Preserved Annually | c.£160,000 | — |
Balance at Term End | £7,000,000 (requires exit strategy) | £0 |
Flexibility | High (overpayments optional) | Lower (fixed schedule) |
Suitability | Asset-rich clients with clear exit | Clients prioritising debt elimination |
Figures are illustrative only and do not constitute personalised advice. Your home may be repossessed if you do not keep up repayments on your mortgage.
Interest-only at this scale is typically reserved for clients who are asset rich with sophisticated financial planning in place. It is not appropriate for borrowers relying solely on property value appreciation or without credible repayment strategies.
How Fox Davidson Support High-Net-Worth and Complex Borrowers
Fox Davidson are award-winning UK residential mortgage brokers specialising in large home loans, complex income structures, and bespoke private bank solutions. We work with clients whose circumstances require more than a standard application to an online lender or high-street bank, including those involved in real estate development and financing, such as construction of high-value properties.
In the context of London investment banking, an interest-only mortgage is often viewed as a financial tool for managing cash flow and diversifying investments.
Clients We Typically Assist
Our expertise extends across a range of high-net-worth and complex scenarios:
- Senior finance professionals: Managing Directors and Partners in investment banking, private equity, hedge funds, and asset management with multi-layered remuneration structures
- International income earners: UK residents paid partly or wholly in foreign currencies such as US dollars, Euros, or Swiss Francs
- Returning expatriates: British citizens returning to the UK who require large residential mortgages before establishing a long UK payslip history
- Complex wealth structures: Clients with significant assets held in company structures, trusts, fine art collections, or investment vehicles rather than straightforward personal income
- Property portfolio holders: High net worth individuals with multiple assets requiring refinance or new purchase funding, including assistance with buying a new home while negotiating the sale of their existing home
Our Process
We follow a structured approach for each client:
- Initial consultation: We discuss objectives, timescales, and broader wealth position to understand the full picture
- Documentation and analysis: We work with clients’ accountants and wealth managers where appropriate to compile comprehensive financial evidence
- Targeted lender approach: We present to private bankers and specialist institutions we know are receptive to complex and international profiles
- Active case management: We manage the mortgage from agreement in principle through valuation, underwriting, and legal completion
We operate across London and the wider UK residential market, with particular experience in prime and super-prime postcodes including Kensington, Chelsea, Mayfair, Belgravia, and St John’s Wood.
If you are a senior professional with complex or international income seeking a large residential mortgage, we would welcome an initial conversation to discuss how we might assist.
Frequently Asked Questions
Can an interest-only mortgage be suitable for a high-value London home in 2026?
In 2026, interest only mortgages remain widely available for high-value primary residence purchases, but lenders are more selective than in previous market cycles. They focus on clear evidence of a credible repayment strategy, strong surplus income after stress-testing, and substantial asset backing beyond the property itself.
For loans above £2,000,000, many solutions are offered through private bank lenders and specialist institutions rather than mainstream high street banks. Eligibility depends on the borrower’s full financial position—including investments, pensions, and other property—not just their salary. Professional advice from a specialist mortgage broker is essential to navigate this market effectively.
How do lenders treat bonus, carried interest, and stock income for affordability?
Most lenders will not take 100% of variable income at face value. Instead, they typically use an average of the last 2-3 years and may apply a discount of 20-50% to reflect volatility and sustainability concerns.
Carried interest from private equity investments and RSUs are often considered on a case-by-case basis. Lenders usually require evidence of a track record of distributions and vesting, plus future schedules from the employer or fund manager. Fox Davidson regularly package this type of income for credit committees, helping lenders gain confidence in the sustainability of total compensation and improving the ability to secure approval.
Can US citizens living in the UK obtain large UK residential mortgages?
Yes, US citizens who are UK residents can obtain substantial UK residential mortgages, but the FATCA regime and US tax reporting requirements mean some lenders will not accept them. These borrowers face additional documentation requirements and may find their options limited to specialist providers.
Several private banks and specialist lenders are experienced in working with US nationals, especially senior professionals in finance and law. Fox Davidson work with lenders comfortable with US clients needed for complex cross-border situations and can guide borrowers through documentation and funding structure requirements.
What deposit and LTV are typical for high-net-worth interest-only borrowing?
Many mainstream lenders cap interest only lending at 50-60% LTV, even for high earners. However, private banks in the super-prime space may consider up to 75-80% LTV where the overall wealth profile supports it and clear exit strategies are documented.
Clients in the £5m+ property bracket are often expected to show significant liquid assets after completion in addition to their deposit—typically a minimum of £500,000-£1,000,000. Each case is individually assessed during the same period of underwriting, and the achievable LTV will depend on income, assets, age, and the quality of the property as security.
How long does it typically take to arrange a £5m+ residential mortgage?
Timelines in 2026 for large, complex residential mortgages are typically 4-8 weeks from initial enquiry to formal offer, depending on valuation booking, legal work, and the speed of information provision by the borrower.
Fox Davidson aim to secure an agreement in principle quickly—often within a few working days once key documents are received—to support negotiations on prime London properties. Early engagement with a specialist broker is advisable where exchange and completion deadlines are tight, especially in competitive prime London market conditions where vendors expect swift, certain funding. This case study reflects our ability to achieve credit-committee approval within six weeks even for complex international profiles.
