For high-net-worth individuals, private banking is a part of wealth management that delivers personalised customer service.
This includes mortgages too. Most private banks target high-net-worth clients and tend to have minimum mortgage loan sizes of between £750,000 and £1 million. Some private banks want borrowers to earn at least £300,000 a year to qualify, while others have tighter rules for overseas investors.
In recent years there has been less of a focus on transferring assets and current accounts to private banks as part of the mortgage process. Coutts recently removed the requirement for a full banking relationship when a mortgage is taken, and borrowers no longer need to have the monthly repayments taken for its bank accounts.
Many high street banks and building societies have set up specialist large loan teams to help brokers like us get the complex mortgages agreed. They realise that some applications need more specialist underwriting than others.
If you are planning to buy an expensive property and need a larger mortgage, it is often better to research the overall market and the private banks to ensure you get the best deal. With rates fluctuating so much now, if you can get a rate that’s 0.75% cheaper through shopping around, it is well worth the effort. Rates have increased across the industry, but some lenders charge much higher rates than others. Private banks often charge percentage-based arrangement fees, while many high street lenders charge £999 or £1,999 fees for their £1 million+ mortgages.
Some private banks are well known for issuing larger loans to borrowers with smaller deposits, while others will lend to overseas buyers using income from multiple sources. Ultimately if your finances are relatively straightforward and you have a good income and a larger deposit, the high street may be the most cost-effective option. In contrast, private banks may be the best option if you have a complex financial situation or you want an ongoing relationship and potentially a dedicated personal banker.