For borrowers seeking multi-million-pound mortgage facilities, traditional lending based solely on income may not provide the flexibility or scale required. In these cases, an investment portfolio — whether comprising equities, bonds, or other marketable securities — can be a powerful tool in securing competitive terms.

In 2025, lenders are increasingly open to using investment portfolios as collateral, particularly in the private banking sector. This approach, sometimes referred to as a Lombard loan or portfolio-backed lending, allows borrowers to leverage their assets without liquidating them, preserving investment strategies while accessing significant property finance. Understanding how these arrangements work, and how to structure them correctly, is essential to making them a success.

How Portfolio-Backed Lending Works

Portfolio-backed lending is essentially a secured loan, where the investment portfolio serves as collateral alongside, or instead of, the property being purchased. The lender takes a legal charge over the portfolio, meaning they can liquidate assets if the loan is not repaid.

This arrangement can appeal to high-value borrowers because it allows them to:

• Preserve long-term investment positions without triggering capital gains tax.
• Access higher loan-to-value ratios than might be possible based on income alone.
• Negotiate more flexible repayment structures, including interest-only terms.

Private banks are the main providers of these facilities, tailoring the lending terms to the portfolio’s size, asset mix, and volatility. Our blog on How Private Banks Are Underwriting Mortgages in 2025 Using Investment Portfolios & Asset-Based Lending explores the broader context of this lending strategy.

The Advantages for Large Loan Borrowers

For clients seeking £2M–£10M+ mortgage loans, using an investment portfolio as collateral can open doors that would otherwise remain closed. Lenders may be willing to extend higher amounts, offer preferential interest rates, or provide bespoke repayment schedules aligned with the client’s liquidity events.

A well-structured portfolio-backed arrangement can also simplify the approval process. Rather than focusing heavily on detailed income analysis, the lender’s primary concern becomes the quality and stability of the portfolio. This is particularly useful for clients whose income is irregular or derived from sources such as dividends, bonuses, or offshore investments — scenarios that can challenge traditional affordability models.

Key Considerations and Risks

While portfolio-backed lending can be highly effective, it is not without its complexities. Market volatility can impact the value of the collateral, potentially triggering margin calls if the portfolio’s value falls below agreed thresholds. Lenders will typically require the portfolio to maintain a certain value relative to the loan amount, and may demand additional funds or securities if that ratio is breached.

Borrowers also need to consider the impact of granting a lender control over part of their investment portfolio. In some cases, the lender may impose restrictions on investment strategies or asset types while the portfolio is pledged. For these reasons, close coordination between your mortgage broker, wealth manager, and legal advisers is essential.

For clients using offshore investment portfolios, additional due diligence is required. We explore these issues in more depth in How to Finance UK Property with Offshore Income or Assets in 2025.

When This Strategy Works Best

Portfolio-backed lending is most effective for borrowers who:

• Have significant, diversified investment portfolios.
• Prefer not to liquidate assets to fund a property purchase.
• Require large or ultra-large mortgage facilities.
• Have complex or irregular income patterns.

It is particularly suited to buyers of prime property, where the purchase price exceeds the comfort level of mainstream lenders. For examples of structuring finance in this market, see our blog on Large Mortgage Loans in 2025: How to Secure £2M–£10M Finance.

How Willow Private Finance Can Help

At Willow Private Finance, we regularly arrange large mortgage loans secured by a combination of property and investment portfolios. Our understanding of both the lending market and the wealth management sector allows us to negotiate terms that maximise flexibility while protecting your investment strategy.

We coordinate with your wealth manager to ensure the portfolio structure meets lender requirements, and we manage the application process to address compliance, valuation, and legal considerations from the outset. This joined-up approach helps avoid delays and ensures that the finance package supports both your immediate purchase and your long-term financial plan.

Frequently Asked Questions

What does “portfolio-backed lending” mean in the context of UK mortgages?
It refers to using an investment portfolio (stocks, bonds, securities) as collateral — either alongside or instead of the property — so the lender has legal charge over the portfolio and can liquidate it in case of default. Willow Private Finance

What are the advantages of using an investment portfolio to secure a large mortgage loan?

• You can avoid selling investments and triggering capital gains taxes. Willow Private Finance
• It may allow higher loan-to-value ratios than relying on income alone. Willow Private Finance
• It opens more flexible repayment structures (e.g. interest-only). Willow Private Finance
• Lenders shift focus from income checks to portfolio quality and stability, which helps borrowers with irregular or nontraditional income streams. Willow Private Finance

What are the risks and constraints of portfolio-backed lending?

• Market volatility can trigger margin calls if the portfolio value drops below agreed thresholds. Willow Private Finance
• The lender may impose restrictions on asset types or investment strategy while the portfolio is pledged. Willow Private Finance
• The borrower cedes some control over the portfolio's liquidity and possibly the ability to trade parts of it if encumbered. Willow Private Finance
• For offshore portfolios, increased due diligence and regulatory scrutiny apply. Willow Private Finance

For what kinds of borrowers or deals is this strategy most useful?

• Borrowers with large and diversified portfolios who don’t wish to liquidate holdings. Willow Private Finance
• Deals involving high-value or prime properties where standard mortgage criteria alone would not suffice. Willow Private Finance
• Borrowers whose income is complex or irregular (e.g. dividends, bonuses, offshore assets). Willow Private Finance



What should you ensure when structuring portfolio-backed mortgage proposals?

• The portfolio must meet lender criteria in terms of asset mix, liquidity, and diversification. Willow Private Finance
• Clear legal charge documents must be prepared so the lender can take control if needed. Willow Private Finance
• Agreement in advance on margin thresholds, triggers, and top-up requirements. Willow Private Finance
• Close coordination among the borrower’s wealth manager, legal counsel, and mortgage broker to align the portfolio structure with lender expectations. Willow Private Finance

📞 Looking to Use Your Investment Portfolio for a Large Mortgage?

Book a free strategy call with one of our mortgage specialists.

We’ll help you structure the finance in a way that works for you and your investments.