Asset-Depletion Mortgages: Turning $2 Million in Investments Into Buying Power

Asset-depletion mortgages offer a unique way for individuals with substantial assets—but limited monthly income—to qualify for a mortgage. Whether you’re a retiree with a robust investment portfolio or a self-employed professional with fluctuating income, asset-depletion loans may unlock your homeownership goals without the need to liquidate investments.

In this article, we explore how asset-depletion mortgages work, how lenders calculate qualifying income from assets, and how you can turn $2 million in investments into real buying power.

What Is an Asset-Depletion Mortgage?

An asset-depletion mortgage, also called an asset-utilization loan, allows borrowers to qualify based on their liquid assets rather than traditional income. These mortgage products are designed for high-net-worth individuals who have significant savings, investment accounts, or retirement funds but lack the typical W-2 or 1099 income stream.

Who It’s For:

• Retirees with retirement savings
  
• Entrepreneurs with volatile income
  
• Individuals living off passive income or dividends
  
• Trust fund beneficiaries
  
• Investors with non-traditional income sources
  

How Does an Asset-Depletion Mortgage Work?

Instead of requiring proof of consistent income, lenders use a formula to calculate how much income can be “depleted” from your asset pool over time—typically 240 months (20 years).

Typical Calculation:

If you have $2 million in qualified liquid assets:

• Exclude any down payment or reserves
  
• Apply an asset-depletion rate (usually based on a 20-year term)
  
• $2,000,000 ÷ 240 months = $8,333 monthly qualifying income
  

This $8,333/month figure can be used by the lender as your income for debt-to-income (DTI) ratio calculations, helping you qualify for a larger loan—even without a traditional job.

See if you qualify for an asset-depletion mortgage.

What Types of Assets Can Be Used?

Not all assets are treated equally. Lenders typically accept the following:

Pros and Cons of Asset-Depletion Mortgages

Pros:

• No need for traditional income documentation
  
• Retain investments without liquidation
  
• Flexibility for high-net-worth borrowers
  

Cons:

• Higher interest rates than traditional mortgages
  
• Not all lenders offer asset-depletion programs
  
• Stringent asset documentation required
  

Speak to a mortgage advisor to explore your options.

How Much House Can $2 Million in Assets Buy?

If a lender calculates $8,333/month in income from your $2 million portfolio, you could potentially qualify for a loan around $1 million or more, depending on credit score, interest rate, and liabilities. This significantly expands your buying power without selling off assets.

Is an Asset-Depletion Mortgage Right for You?

You may benefit from an asset-depletion loan if:

• You’re retired and want to buy a new home
  
• You want to preserve your investments for future growth
  
• You have substantial liquid assets but inconsistent income
  

It’s essential to work with a lender familiar with asset-depletion underwriting, as criteria and formulas can vary.

Get pre-qualified today with our asset-based lending experts.

FAQs About Asset-Depletion Mortgages

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By converting your $2 million investment portfolio into qualifying income, an asset-depletion mortgage can open the door to new real estate opportunities without compromising your financial future.