Private Bank Mortgage Loans vs. Traditional Bank Mortgages

Private Bank Mortgage Loan

Private bank mortgage loans are an alternative to traditional bank mortgages; they generally allow borrowers to borrow large mortgages. Private Banks can also accommodate non-standard clients, rather than the high street lenders that can be a little more inflexible in their lending criteria.

Learn More About Private Bank Mortgages.

Private banks often only lend when the mortgage requirement exceeds £1,000,000. Target clients will often be high net worth borrowers with £3,000,000 in net assets or have high incomes, at least £300,000 plus.

A Private Bank can be more flexible in its lending approach; this could be for;

  1. Client’s residency status
  2. How income is assessed and evidenced
  3. Greater flexibility in how mortgage affordability is considered

Are Private Bank mortgages Better Than Traditional Bank Loans?

Private bank mortgage loans are an excellent option for those for borrowers with highly complex circumstances or non-standard income. However, there are some downsides to using a Private Bank mortgage:
  1. The rates and fees charged by a Private Bank are often at a premium to the high-street lender.
  2. Private banks can take longer to assess mortgage applications; often, a bank account needs to be opened as part of the application.
  3. Private Banks can be selective in lending location, preferring prime postcodes.

Understand The Benefits Of A Private Bank Loan.

Private Banks can lend on an asset slicing basis for High Net Worth clients, this is where their ordinary income does not meet affordability, but the client has assets they could sell to afford their lifestyle and service the mortgage.

Borrowers with income from tax havens such as Monaco or Dubai will struggle to obtain a mortgage as their income will not be registered on a tax return. Private Banks are willing to take a view on income by looking into bank statements or taking references from accountants or banks to prove affordability.

Some private banks specialise in assisting clients working in specialist industries, for example, sports, entertainment, private equity, law firms & entrepreneurs. These banks will have specialist teams that understand these sectors and can apply greater flexibility when assessing income and affordability.

Know When To Apply For a Private Bank Mortgage

Regular mortgages are applied for after making an offer on a property. However, part of the process with private banks will be to open a bank account. This can be the lengthiest process as background checks need to be completed. We recommend starting the process as early as possible to ensure that the account opening does not delay the mortgage application. Therefore, before you find a property, we normally start the bank account opening process.

Discover How Much You Can Afford

If you’re interested in learning more about private bank mortgage loans, please do get in touch. We will be happy to assist in making enquiries to review the best market terms from Private Banks.

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