A private bank mortgage is no longer the privilege of the ultra-rich and old money trust-a-farians. Indeed, in the past decade or so private banks have made a move away from a dated stigma and are now a “growth” sector that can offer some very practical advantages to a wide array of clients. Perhaps the most important difference is that a private bank will consider you as a name, rather than a number.
The pros of a private bank mortgage…
Besides considering you as a real person they are also happy to think about your full financial picture, discuss your goals and prospects and then make a decision on your private bank mortgage on the basis of that. They can offer some highly competitive rates for new clients and they have less rigid criteria than their high street counterparts.
This means that a private bank mortgage is not mass-market and they decide applications on a case-by-case basis. It is important to remember that although they are not typically interested in lending below £500,000 they are primarily concerned with establishing long-term relationships with clients. For this reason, they tend to take in the entire wealth of the individual to determine the prospect of taking them on as a client. The better that client looks, the more flexible they will attempt to be – and the better the private bank mortgage rate they will offer.
It’s important to remember that the majority of private banks are willing to make concessions as they regard the mortgage as a stepping stone to a long-term relationship in which they will look after your family’s wealth. This means that they want to know what your goals are, what your history is and even where your children go to school and how often you shop in Waitrose.
What can I expect?
In the past private banks have stressed the need for AUM (assets under management) with them as one of their main priorities. However, although this is largely true of private banks, we happen to have relationships with about five or six whose emphasis has shifted now; meaning that there is a bigger scope for negotiation with these banks if AUM is not something that you are willing to commit to at that time. However, you might have to deal with slightly higher rates as a compromise.
This means that there aren’t really specific private bank mortgage rates or fixed criteria with them but each private bank is different and each has their preference as to who their “ideal client” is. As the assessment of each private bank mortgage application is so much more tailored than with the high-street, it is also typically more in-depth and you should expect to have to provide more supporting documentation and to meet with the bank in person.
As might be evident, a private bank mortgage transaction is a lot more flexible but carries inherent complexities. For this reason, your circumstances, availability of supporting documents, bank account opening and the overall speed of the bank completely dictates the speed at which a transaction can complete. A private bank mortgage can complete as quickly as just a couple of weeks to several months.
“Private” in fact applies to the level of service you can expect to receive and, in our experience, wealthy borrowers need certain things that high street lenders are not good at delivering. Besides there are numerous other advantages to having a dedicated bank manager at the end of the telephone now – such as concierge services, exclusive credit cards and tailored products, to name but a few.