Private Bank vs High Street Bank Mortgages
What is the difference between a high street bank mortgage and a private bank mortgage?
If you are looking to secure a mortgage in the UK, you are likely to be faced with a number of lender options including private banks and high street lenders. Deciding which route to go down can be a difficult decision with each option having their own considerations, benefits, and features.
Comparing your mortgage options is a key step in the process and is not something that should be taken lightly, as it can significantly impact your long-term financial situation. Especially when some of the shorter mortgage terms offered by private banks and the ongoing requirements for them to manage your assets to "build a banking relationship."
Using a private bank rather than a high street bank for a high-net-worth (HNW) or ultra-high-net-worth (UHNW) mortgage often makes sense for several key reasons, even though both types of banks can offer mortgages. Here's a breakdown of why a private bank is typically preferred—and when a high street bank might still be better.
Why Use a Private Bank for an HNW/UHNW Mortgage?
1. Tailored Lending Solutions
Private banks understand complex financial profiles. They can:
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Consider non-traditional income (like dividends, carried interest, or trust income).
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Offer interest-only, asset-backed, or bullet repayment mortgages.
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Structure cross-border financing (e.g., if you own assets or property in different countries).
2. Higher Loan Sizes
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Private banks are used to dealing with multi-million-pound loans or mortgages well above standard lending caps.
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High street banks often cap their maximum loan amounts or have stricter LTV (Loan-to-Value) limits for large loans. Although many of them can issue mortgages of £5 million or £10 million.
3. Holistic Wealth-Based Mortgage Lending
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They look at your total wealth (not just income) and may allow mortgage lending against a portfolio of assets (investment accounts, real estate, etc.).
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You might be able to leverage your investment portfolio to reduce or offset interest (a strategy not typically supported by high street banks).
4. Discretion and Personal Service
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Private banks offer relationship-driven services, often with a dedicated private banker or team.
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Their service is more bespoke, sometimes faster and more flexible for complex transactions (e.g., buying a home through a trust or offshore company).
5. Cross-Selling Benefits
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Mortgages can be part of a broader relationship: the bank may offer better terms in exchange for managing a portion of your assets (e.g., £1M+ in investments).
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Some UHNW individuals use mortgages with private banks to strengthen their overall relationship, opening doors to exclusive investment opportunities, foreign exchange services, or estate planning tools.
When a High Street Bank Might Be Better for a Mortgage
1. Simple Borrowing Needs
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If your income is straightforward (e.g., salary-based) and you want a simple mortgage, high street banks may offer better rates and fewer fees.
- They may well have a better selection of fixed and Bank of England base rate trackers.
2. Regulated, Transparent Products
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High street banks tend to offer more transparent pricing and are fully regulated, reducing the risk of hidden costs.
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Their products are often more straightforward, especially useful if you're unfamiliar with complex borrowing structures.
3. Lower Minimum Wealth Requirements
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High street banks don’t require you to park £1M+ in investable assets to get access to a mortgage.
Summary: Private Bank vs High Street Bank for HNW/UHNW Mortgages
| Feature | Private Bank | High Street Bank |
|---|---|---|
| Flexibility | Highly–tailored solutions | Lower – more rigid criteria |
| Borrowing Size | Very High | Typically capped altough still offering £1 million+ mortgages |
| Credit Assessment | Based on wealth + assets | Based on income + credit score |
| Complexity of Structures | Can accommodate complex legal/tax setups | Limited flexibility when the client has a complex financial situation or receives foreign income. |
| Interest Rates | May be higher (or negotiable) | Often lower for standard products |
| Service Model | Relationship-based, highly personalised | More transactional - although mortgage offers are often still produced within two weeks |
| Additional Requirements | Often need to move assets to the bank | No additional AUM requirements |
Private Bank vs High Street Bank Mortgages - Final Thoughts
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Use a private bank if you have significant assets, a complex financial setup, and want a bespoke, flexible solution.
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Use a high street bank if your borrowing needs are standard and you want a quick, cost-effective solution.
Call Trinity Financial on 020 7016 0790 to secure a high-net-worth or ultra-high-net-worth mortgage, book a consultation, or complete our mortgage questionnaire.
The information contained within was correct at the time of publication but is subject to change.
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