Private banks may offer the cheapest mortgage deals.

Private banks may still offer some of the cheapest mortgage deals despite a number of lenders raising their mortgage rates in recent weeks.

RBS Private, Barclays Wealth and UBS are the latest banks to increase their mortgage rates as the result of higher funding costs in the wholesale market.

The private banking sector as a whole has seen a shift in pricing on debt, with the most notable increases from coming from Barclays Wealth.

However, in spite of these recent rate increases, private banks still offer the cheapest mortgage rates for home buyers looking to borrow more than £1 million.

High street lenders who consider lending larger amounts generally do not offer competitive enough rates, plus lending criteria and interest only mortgage policy excludes many borrowers.

A private bank is not governed so much by rigid rate sheets and will price every deal individually according to the overall financial profile of a client. They do not rely solely on calculations based on LTV and income and so can be more flexible.

There is often a misconception that borrowing from a private bank is more expensive than borrowing from the high street.

High street banks may become more competitive in the large loan market in the coming year but they “struggle” to understand how a wealthy borrower differs from a person with just one source of employed income.  When assessing income, private banks will consider bonuses and therefore are often a better option for wealthy self-employed borrowers who are looking for the cheapest mortgage deal.

As a 'whole of market' broker Deal Direct can help whatever the loan amount. We are up to date on mortgage providers latest rates and lending criteria and are well placed to source you a competitive deal.

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