NEWS: 5.5x Income Mortgage Product for New Law Firm Partners

A high-street bank is now offering a mortgage for new law firm partners worth up to £2m with a 5.5x loan to income ratio and high loan to value threshold.

If you’ve recently made partner at your law firm and are looking to leverage your new income towards a bigger mortgage, it's a product that could get you the large property finance you need at competitive, high street interest rates.

Lower rates than you could likely get through a private bank or specialist lender – which is where most equity partners end up going in order to reach the loan size they need with their unique income structure.

Why is it difficult to get a mortgage through a mainstream lender as a new law partner?

There are a few main reasons why most high street banks won’t lend you the maximum amount as a law partner:

• Your income will transfer to self-employed upon making partner
• This is riskier for lenders and it’s not contracted, and you typically require at least 2 years of self-employed income history for a mortgage
• A large portion of your income will be annual bonuses compared to salary, which isn't guaranteed and can fluctuate in value based on your performance
• Lenders typically only take 65% of your bonus or commission earnings into account for your mortgage application, and again, you’ll need 2 years of previous payments
• Big banks and lenders are set up for the masses – large volumes of ordinary, low-risk mortgages
• They don’t usually have specialist underwriters in place to account for complex and bespoke income scenarios like an equity partner

What is the new mortgage lending criteria on offer?

To qualify for the mortgage product, you’ll need to have worked at your law firm for at least 3 years.

But if you have, you can expect:

• Up to £2m loan size
• Loan value of 5.5x your annual income
• Only a 15% deposit is required (85% loan to value)

And compared to a private bank or specialist lender, the interest rates you’ll pay on your mortgage will be significantly cheaper.

Related: How to Get a Mortgage as a New Law Partner

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