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Private bank mortgage

Journalist: Frances Ivens, Telegraph

ended 22. August 2023

Question for an article in the Telegraph.

What are the benefits of going to a private bank for a mortgage rather than a high street lender?

Is there a minimum income/ asset wealth you need to be able to go to be a private bank customer?

7 responses from the Newspage community

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Stephen Perkins
Managing Director at Yellow Brick Mortgages
Most private banks will only want to deal with higher earners or those with over £1 mil invested with them. The benefits are their mortgages are usually individually underwritten so can be a little more flexible on the property such as acreage or annexes. They will also usually assess the lending based on their relationship with the client and their assets as opposed to looking just at income. However, the loan to values are usually lower and rates not usually market-leading so usually just a backup option if a high net-worth client has a situation or property outside the scope of the mainstream lenders.
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Ross Lacey
Director & Independent Financial Adviser at Fairview Financial Management
Private banks generally offer mortgages for borrowing amounts over £1m. There are several reasons we may look to private banks to provide mortgages for our clients; including the ability they have to make lending decisions on a more bespoke basis, factoring in more complex income streams and other assets to make the numbers work where a high street lender couldn't. A good example of this is clients who have significant wealth held in investments but no "earned income" - private banks are able to consider the income that could be generated from those investments as part of their affordability calculations.
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Darryl Dhoffer
Founder at The Mortgage Geezer
High Street lenders typically offer cheaper overall interest rates, however, that gap is shortening with Private or Non-High Street lenders, becoming very competitive on rates with quicker processing for many as well. Many Private banks will only deal with min mortgage size of £1 million +. complex income sources, foreign Nationals and Ex-Pats, whereas high street lenders essentially cater for the mainstream client, with much lower mortgage sizes. Also, the "one cap fits all approach" with High Street lenders can be frustrating with many consumer variables, again Private lenders can also fill some of that gap, as will deal with income from multiple sources, including trusts or investment portfolios.
In all cases, an experienced "whole of market" advisor will find the best mortgage product most suitable for the client's circumstances and should be any consumer's first port of call.
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Samuel Mather-Holgate
Independent Financial Adviser at Mather and Murray Financial
Private banks require you to meet either an income or capital threshold. If you are a private banking customer they can then assist with your borrowing needs. Private banks rarely offer better rates than an independent mortgage adviser can get you, but clients like the convenience of having everything in one place, dealt with by one relationship manager. Some private banks also offer portfolio lending, where they will use your investments as security for any loans they make. This can speed up some lending when it's needed quickly, like second homes, overseas property or auction puchases.
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Emma Jones
Managing Director at Whenthebanksaysno.co.uk
You can often secure lower rates when you are a private banking client but this can often be restrictive with most private mortgage lenders requiring minimum account balances with them and can even involve moving your main banking with them. It is always best to search with an adviser covering the whole of the market to ensure the saving is worth the move.
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Ashley Thomas
Director at Magni Finance
Private bank mortgages are generally for loans above £1m. It is for those that do not fit high-street bank lending criteria as private bank mortgages can offer a more bespoke solution.

Private banks will factor in a client's entire financial situation – taking into account “non-conventional” income sources such as foreign currencies, stocks portfolio or other various structures like trusts.

Private banks offer flexibility, regularly offering different options and can secure against a number of different assets. For International banks, they can offer loans against property assets in the UK and other locations. We currently have a client where we are looking to secure a loan above £10m with a private bank that will be against a property in London, Monaco and against stock assets. This wouldn’t be possible with a retail bank.
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Ben Tadd
Director at Lucra Mortgages
The benefits of going to a private bank for a mortgage are that these lenders take a more holistic approach to lending based on the overall client profile and scenario, meaning that they can often accept unconventional applications that still offer the bank good security, that would normally be rejected by the high street. Underwriters within private banks have the scope to underwrite cases on a bespoke basis, taking account of a multitude of income from various sources as well as assets and even taking account of an applicant's CV and work history, combined with their future plans and income projections. Private banks can often offer more flexible products as well, with overdraft, offset and drawdown facilities provided. Most private banks aim to lend to customers borrowing £1 million plus but can go below this for the right client profile, and they often like applicants to have minimum residual savings/assets in place, with these minimum expectations varying case by case.