Private Bank Mortgages

There are many reasons why high net worth individuals use private bank mortgages – one major reason being accessibility. For clients seeking large loans in excess of £1 million pounds, and who do not fit high-street bank lending criteria, then private bank mortgages can offer a more bespoke solution.

Private banks will factor in a client’s entire financial situation – taking into account “non-conventional” income sources, such as foreign currencies, vested stocks, or other various structures, like trusts, alongside other types of assets when calculating how much they will lend.

Magni Finance, through private banks, will help find clients the best mortgages for high value properties in the UK. If a client’s situation is complex, they will likely find it more challenging to access a large loan through mainstream lenders. However, fortunately, this is where Magni Finance can help such individuals.

With over 25 years combined experience, we have built trusted relationships with some of the best private banks in the UK who can offer large mortgage loans to our clients quickly while offering competitive interest rates. Using sophisticated financial solutions, clients with Magni Finance will find that private banks are the best option for purchasing properties worth £1 million pounds or more in the UK.

Flexibility is an additional factor many high net worth clients seek when it comes to larger loans. Fortunately, private banks can offer higher LTVs (loan to values) than high street banks. Most mainstream banks cap lending above £1 million to 85% loan to value. A private bank, however, can lend 90%, and potentially up to 95%, of the property value for the “right clients”.

If a client can demonstrate that they are in the right financial position, then the private bank we introduce them to will offer a more flexible approach than a high street bank. Hence, private bank lenders vs high street lenders can provide both a more personalised service and more flexible lending terms.

The service private banks offer is exceptional not only because they offer flexible and accessible mortgage products for wealthy clients, but also because the service is high-quality, discreet and professional.

For instance, by using a private bank for a mortgage, clients’ financial information will be kept completely confidential and not shared with third-parties, such as credit agencies, as they would usually through a high street bank. Furthermore, private banks work with a smaller set of clients. As a result, they can offer more bespoke solutions and are able to build longer-term relationships with clients.

At Magni Finance, we work alongside a trusted network of private banks who will go above and beyond for our clients. Therefore, busy clients with Magni Finance will be able to access private banking more efficiently – consequently, saving them both time and money.

Unlike high street banks which can be accessed at one’s convenience, private banks work on a more private basis. Therefore, private bank mortgages are typically accessed through industry contacts.

Clients with Magni Finance, therefore, will be introduced to the most suitable and competitive private bank lender based on their individual circumstances. The overall process works similarly to as it would through a high street bank – however, a private bank will work on a case-by-case basis. Once we have introduced a client officially to a private bank within our trusted network we will then negotiate the terms of the private mortgage, such as pricing.

During the personal introduction to the private bank, we will also discuss the overall financial situation of the client. The private bank will consider, for instance, the client’s overall global assets and liabilities and determine whether or not there are additional services they can assist with.

For example, if you require help with other investments, such as with bonds or stocks, then the bank may be able to offer industry leading advice. Furthermore, non-standard forms of income will be considered, alongside clients that may wish to buy properties overseas or those that may currently reside outside of the UK and wish to invest in the UK market. Our private bank mortgages, overall, are considerate of all backgrounds and lifestyles.

Some private banks will require ‘Assets Under Management (AUM)’ as part of the mortgage arrangement. AUM, in short, is where a private bank will then manage a client’s total wealth, such as by transferring stocks or cash to the bank, and may be part of their policy to access a high net worth mortgage. However, not every bank requires assets to be transferred and can offer clients what is called ‘dry lending’.

To access a private bank mortgage, clients will need to borrow a minimum of £1 million and additionally meet High Net Worth criteria. Private banks, in comparison to mainstream lenders, will offer more flexible and affordable loans. They will assess all assets/liabilities and income streams – provided that sufficient evidence is given.

Clients, just as they would with a mainstream mortgage lender, will need to ensure all of their documents are prepared before they are introduced to a private bank to ensure the process is as efficient as can be.

Unlike standard mortgage loans which are secured against property, private banks can secure loans against other liquid assets. Typically, high net worth individuals tend to have cash, stocks, portfolios and other forms of investments. Asset based lending or Lombard finance enables clients to leverage their existing assets without having to liquidate them.

Private banks can usually lend up to 60% of the value of stocks and up to 100% of the cash value. This is a sophisticated solution which Magni Finance has extensive experience in arranging. Other assets that can be financed are:

• Properties onshore/offshore

• Jets

• Yachts

• Vintage cars

• Fine art

• Business assets

• Other investment portfolios and assets

Due to private bank mortgages offering flexibility, clients need not worry about what form of asset they will need to secure against a property. Instead, a private bank lender will work with them individually to find which asset is best for long-term investment and personal purposes.

Though there is no set nor widely used definition for a high net worth individual (HNWI), such people are generally considered by the FCA (Financial Conduct Authority) as those that earn more than £300,000 per annum or have net assets worth more than £3,000,000.

A high net worth individual, furthermore, tends to be the type of client private banks are willing to lend mortgages to. Nonetheless, such clients need not fit the archetypal image of generational wealth, as increasingly more young professionals and first-time buyers are using private banking for mortgage loans in the UK.

If you would like to access a private bank mortgage, yet you are unsure of what constitutes a high net worth individual, then visit here for more details.

Interest-only mortgages are increasingly sought after by high net worth individuals because of their many financial advantages. For instance, an interest-only mortgage may help free up cash for other investments – whether it be to support a business, funding education or another project.

Clients, through Magni Finance, may be able to access an interest-only mortgage worth up to 90% of the property value through a private bank. Nonetheless, an interest-only mortgage may not be a viable option for all clients. Primarily because interest-only mortgages, by the end of the repayment term, will result in clients still owing the original amount of money borrowed.

Other factors, such as the current property market alongside inflation need to also be examined when considering an interest-only mortgage – which Magni Finance, and the private banks we have built strong relationships with, can help examine.

The FCA sets a limit of the amount of mortgages lenders can provide based on 4.5 times an individual’s salary. Meanwhile, the cap for higher loan-to-income (LTI) is set at 15% per quarter.

Mainstream lenders can generally offer between 4.5 to 5.5 times an individual’s income. However, private banks set no limits to how much they will lend. How much a client can borrow will depend on whether or not they meet high net worth lending criteria; for example, earning at least £300,000,000 per year or having £3,000,000 in assets. Hence, choosing a private bank mortgage will provide more flexibility for clients wishing to access properties in some of the most expensive and sought after areas in the UK.

Yes, if you are based outside of the UK then you can still access a private bank mortgage through us. We have a number of lenders who will consider both non-standard forms of income as well as non-UK residents wishing to invest in the UK property market.

International clients, nevertheless, will need to meet an additional set of eligibility criteria. Such clients will need to earn at least £100,000 per annum as well as have a deposit of between 25% to 40%.

If you live outside of the UK and are considering a private bank mortgage, visit our dedicated international client pageon how we can work with you and discover additional eligibility information.

At Magni Finance, we have a deep understanding of the private banking world. We are not tied to any private banks so there are no limits on which banks we can approach. Our extensive knowledge, along with our excellent contacts in this sector, are what separates us from other brokers and allows us to negotiate the very best terms for our clients.

If you are looking for a mortgage for a property that is worth over £1 million or even £10 million, then get in touch today to find out how we can help or can give you expert advice when it comes to high net worth mortgages through private banks.