The private bank mortgage guide

A private bank mortgage is a property loan from a bank whose business model is built around high net worth and ultra-high net worth clients. Private banks underwrite holistically rather than to a published scorecard. They consider the borrower's complete balance sheet - liquid investments, other property, business interests, expected inheritances, future earnings trajectory - rather than just current income against current debt.

The product itself is similar to a mainstream mortgage on the surface: a loan secured by a UK property, repaid over an agreed term. The differences sit in the underwriting flexibility. Private banks routinely write interest-only loans over 5-25 years where the repayment vehicle is the sale of investments or another property. They accept multi-currency income without applying punitive FX discounts. They write to trusts, foundations and offshore SPVs that high-street banks decline. They lend to non-resident foreign nationals on UK property where mainstream lenders cannot.

The active private bank mortgage market in the UK has 15-20 banks of meaningful scale. They split broadly into UK-domestic private banks (Coutts, Hampden & Co, Arbuthnot Latham, Cazenove, C Hoare & Co, Weatherbys), global private banks with UK lending desks (JP Morgan Private Bank, Citi Private Bank, UBS, Julius Baer, Credit Suisse, Goldman Sachs Private Wealth), and the private bank divisions of specialist banks (Investec, Handelsbanken, EFG Private Bank, Brown Shipley, Schroders).

Each has its own niche. UK-domestic private banks tend to focus on UK-resident HNW clients with established UK lives. Global private banks lend internationally and write substantial deals for non-resident foreign nationals. Specialist private banks (Investec especially) are the most active in the £1m to £10m mortgage range and frequently write dry mortgages with no AUM expectation.

Private bank credit decisions are made by a credit committee on a case-by-case basis rather than by an automated scorecard. The submission to credit committee looks more like a structured credit paper than a mortgage application. It will typically cover the property, the borrower's biography and source of wealth, the income picture (with three to five years of supporting evidence), the asset and liability statement, the loan rationale, the repayment vehicle and the wider banking relationship value.

What that means in practice is that private bank applications take longer to put together than mainstream applications but are more likely to result in an offer once committee approves. A high-street mortgage may take three weeks from application to offer. A private bank mortgage may take four to six weeks. The credit committee's appetite is broader on the way in but the documentation work is heavier.

Some private banks require an assets-under-management (AUM) relationship in exchange for their keenest mortgage pricing. The bank manages a portfolio of investments for the borrower, charging an annual management fee, and the borrower receives access to a competitive mortgage facility. The minimum AUM is typically £1m to £3m for an active mortgage relationship, sometimes higher.

Other private banks write dry mortgages - property lending with no AUM requirement at all. Investec, Hampden & Co, Arbuthnot Latham and several specialists actively market dry mortgages. The pricing is typically 0.25-0.5% above the AUM-bundled equivalent but the borrower retains full control of their investment portfolio.

The right answer depends on the borrower's existing wealth structure. A borrower with an established investment manager they do not want to move will prefer a dry mortgage. A borrower without an active investment manager and meaningful liquidity may find the AUM-bundled offering economically attractive and operationally simpler.

Private bank mortgages are usually the right answer in five scenarios. First, loan size above £5m on residential property where the high-street large-loan books cap out or price punitively. Second, borrowers with complex income (carried interest, RSU, multi-currency, dividend-heavy) where high-street underwriting takes a punitive view. Third, non-resident borrowers on UK property where mainstream lenders cannot engage at all. Fourth, structured ownership through trusts, foundations or offshore SPVs that mainstream lenders will not accept. Fifth, borrowers wanting genuinely long-term interest-only structures (15-25 years) with realistic repayment vehicles.

Private bank mortgages are usually not the right answer for simple £1m-£3m residential purchases by UK-resident PAYE borrowers with vanilla income. The high-street prime large-loan books (HSBC Premier, Barclays Premier, NatWest Premier, Lloyds Private) will typically out-price a private bank on those cases. We will tell you up front whether your case sits in the private bank zone or whether a high-street large-loan product is the better answer.

A private bank mortgage application typically runs as follows. Week one: initial mandate call with the broker, indicative terms returned from three to five banks. Week two: borrower selects preferred bank, full credit submission begins. Weeks three to four: KYC, source of wealth, source of funds documentation, valuation instruction. Weeks four to six: credit committee review and decision. Weeks six to eight: legal documentation and completion.

Where speed is critical (auction purchase, sealed-bid deadline) a bridge first, refinance second strategy is often used. We arrange short-term bridging finance to complete the purchase inside the deadline, then refinance to the private bank mortgage at month three to six once the credit committee process has run properly. This is a common pattern on PCL purchases.