For high net worth clients with high value or complex mortgage requirements, private banks have long been the best option for securing a bespoke solution tailored to their needs, offering a diverse range of opportunities compared to the strict criteria found on the high street.
However, wealthy clients looking to take out a mortgage or remortgage their existing property with a new lender, can often find themselves having to move all of their assets as well. Some clients may be happy to do this if the bank is offering a particularly lucrative deal, yet if you’re happy with your existing asset management, the need to transfer it and potentially alter your return on investment can be frustrating.
Securing dry lending – where assets do not need to be transferred in order to secure a mortgage – has become increasingly difficult when qualifying for a private bank mortgage, with some lenders requiring up to 50% of the loan amount in Assets Under Management (AUM) and insisting on clients transferring assets before they will lend at all.
Private banks are generally looking for a credible AUM opportunity or the potential for a wealth management relationship with a client when accepting an application – even if it’s in the medium to long-term. Equally, some lenders will work towards lending targets for the year, which once accomplished, can cause them to pull out of the dry lending area of the market until the following year. While others simply stick to a policy of obtaining at least £1million AUM from a client before extending a mortgage.
How we can help you secure a private bank mortgage without AUM
Although it may seem like there are fewer options for securing a beneficial private bank mortgage without having to transfer cash or assets immediately – this is not necessarily the case. As with almost every lender on the current market, private banks are continuing to offer extremely competitive deals and remain a more efficient and profitable option for clients with complex income streams, bonuses, trust or offshore income.
As such, we have longstanding relationships with a vast number of banks in every area of the market, with the opportunity for high net worth clients to access the best terms available for their circumstances. The below case studies are just two examples of how we’ve helped clients do this.
£1.2m private bank loan for personal investments:
We recently helped a client secure a £1.2million private bank mortgage on a £3million property in Earls Court at a rate of just 2.5% with the full loan amount on an interest only basis. This was even more of a challenge as the client required the loan with the intention to raise funds for personal investment purposes, which the majority of banks will not support. Despite this, we placed the client with a private bank that provided a niche offering for private equity individuals, and did so without the requirement of any AUM.
Foreign national private bank mortgage with no AUM:
We also recently secured a private bank mortgage for a foreign national client, even though the loan amount was less than £1million (something that is a standard requirement for many private banks). This client was a high net worth Saudi national from a professional banking background. His earnings were in a foreign currency and he had no financial footprint in the UK. Despite this, we secured a 2 year fixed rate of 2.39% with a 12-month term at 70% loan to value (LTV) for a £960,000 property. This came without AUM thanks to our strong relationship with the lender and ability to negotiate.
Essentially, a well-presented proposal is the key for securing excellent terms and removing the necessity of AUM, especially for a high-quality client in the eyes of a lender. So if you’re looking for a mortgage or remortgage solution, yet wish to leave your other assets with your existing lender – we can help.
Our experts specialise in this area and are trained to offer advice and solutions for the most complex and high value cases. Our connections remain as committed to providing finance for high net worth clients as we are for sourcing the best mortgage products on the market. If you are in need of a private bank mortgage, please do not hesitate to get in touch.