A mortgage rate carries the same value from one lender to the next; if you choose to pay a higher rate with one, it doesn’t yield a larger, better property.
There is no notion of designer mortgages or the fan-club notoriety of going with one lender over another, and your mortgage doesn’t carry a label with it in the same way designer goods will.
When it comes to high net worth clients however, the service and criteria that are on offer to those who are able to pay that little bit extra means that it can pay to go private.
The UK is lucky to benefit from a buoyant private banking sector, due in part to London being such a draw for the super-rich.
According to the 2017 Wealth of Opportunities report from the British Bankers’ Association (now part of UK Finance), private banks generated over £1bn of banking income, amounting to over a third of their total revenue in 2016.
Indeed, the private banking and wealth management sector as a whole managed or administered £825bn of assets in 2016, equivalent in value to more than 40% of the UK’s GDP.
Private banks have become well-known for their investment propositions and offshore accounts but clients needn’t do either in order to use a private bank for their mortgage needs.
Made to measure
There is a belief that private banks are more expensive than retail banks and while this may be true in some cases, the flexibility a private bank can offer clients is invaluable.
You may think that retail banks would be tripping over themselves to offer high earners a mortgage. In reality however, many apply the same tick-box approach to someone earning £3m as they would someone earning £30,000.
Private banks are not tick-box lenders.
We don’t offer clients a ready-made solution but instead a tailored bespoke product, and if we don’t stock your client’s size, we can produce a custom offering that will fit.
High net worth clients may have substantial assets but their needs are very rarely straightforward or slot neatly within the limits of some banks’ criteria.
They generally have incomes from various sources and may require out-of-the-box solutions.
For example, if a client owns a company worth £32m, has considerable assets and wishes to borrow £3m with an additional £80,000 to top up their disposable income – why not?
Instead of a computer deciding the fate of your client’s mortgage, at private banks in-house bankers and credit committee will personally assess the case and tailor it to a client’s needs.