For many, the phrase ‘private bank’ conjures up images of historic, exclusive institutions – and once upon a time, that was a broadly accurate picture. Historically, private banks were the realm of ultra high net worth (UNHW) individuals, who were required to place assets under management (AUM) with the institution in question to secure large loans. Explore the possibilities of a private bank mortgage here.
Yet despite perceptions, the world of private bank mortgages has changed quite significantly over the last decade. And that means more individuals than ever before could stand to benefit.
The benefits of private banking mortgages
There are many benefits to private bank mortgages. As we often illustrate in our case studies, private banks are renowned for their ability to navigate complex situations for clients. Usually, that refers to the client’s individual circumstances – whether they’re an expat, a foreign national, a businessperson with multiple income streams, or have another complicating factor. In recent times, that’s even extended to external complications – such as the coronavirus crisis.
For wealthy or high net worth (HNW) individuals, private bank mortgages can often be a better choice financially, too. Unlike most high street lenders, private banks are more likely to offer negotiated or bespoke terms. With every individual case and its complexities carefully considered, this can often lead to favourable outcomes. Particularly since most private lenders are keen to build a long-term relationship with clients, rather than offering them a short term product.
How have private bank mortgages changed?
The trade off for these benefits is that private bank mortgages have traditionally required the borrower to place AUM with the bank in question. This can be off-putting for many, either because they wish to retain control of their own assets, want to maintain their liquidity, or perhaps don’t have suitable assets or savings to place. In some quarters, private banks also have minimum annual income requirements or other criteria that made private banking a feasible option only for the very wealthy.
This stance has shifted significantly. In many cases, there is no need to be an UHNW individual to secure a private bank mortgage, and it is becoming easier to secure terms without placing AUM, too – meaning borrowers can maintain their liquidity. While it’s certainly still the case that you will need to be a high net worth (HNW) individual in some form, and many private lenders still have minimum income requirements, others are becoming more flexible, particularly with individuals that will likely become a valued long-term client.
Is a private bank mortgage right for you?
The right lender for you will always depend on your circumstances; if you have a very straightforward profile and are seeking a loan under £1 million, it may well be that one of the large high street lenders has the best terms for you. The crucial thing is to not dismiss any particular type of lender out of hand, and especially not the private banking sector: you may be pleasantly surprised by what you discover when you remain open to options across the market.
What is the best way to arrange a private bank mortgage?
Private bank mortgages are best arranged with the help of an expert HNW broker, like Articus Finance. In a world where relationships and deep understanding of a client’s situation are more crucial than meeting tick-box criteria, having a broker who can speak with their contacts and negotiate a strong deal is likely to result in the best outcome.
At Articus, we have helped everybody from British nationals with large bonuses to self-employed expats investing in the UK to secure private bank mortgages on favourable terms. Whatever your situation, we are confident we can find an appropriate lender for you.
Explore the possibilities of a private bank mortgage
Whether you’re seeking favourable terms, a more flexible approach, or a lender that understands complex circumstances, a private bank could be the answer. And, as we have demonstrated in a number of our case studies, these possibilities aren’t only open to UNHWs. We regularly assist clients who don’t have extensive assets available to place under management, or who sit outside the traditional image of someone who might take out a private bank mortgage.
With so few high street lenders able to serve HNW expats and foreign nationals, a private bank mortgage is often a good solution. To learn more about mortgages for expats and foreign nationals in the UK, download our free guide.
