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Differences Between Private Lenders And High Street Banks For Mortgages

Finding the ideal lender is one of the first steps in securing a mortgage, though it's not always easy as it seems.

Customers used to start an application by stopping by their neighborhood high street branch. The mortgage industry's defining principles have, however, changed significantly.

Knowing which way to go can be difficult, especially if your requirements are complicated, as the market has grown saturated with rising demand, particularly from foreign investors, and an influx of lenders.

A More Holistic Approach With Private Lenders

Case-by-case decisions are made by private banks, who view you as a person rather than merely an account number.

When determining affordability, they typically focus on your objectives and prospects rather than criteria because they see the big picture of your situation.

Because of this more all-encompassing strategy, they are typically more willing to take into account a client's entire wealth rather than just their basic needs and to give more thought to your unique circumstances.

High street lenders, however, can be a better choice if you're taking out small loans against just one piece of real estate, while still having access to competitive rates. However, because private banks aim to build long-term relationships and provide greater flexibility in return, their mass-market strategy can be a turn-off.

Private Lenders Can Work In A Quicker Time Frame

Even though it might be more convenient to walk down the high street to your local branch, you'll almost always need to schedule a consultation appointment before you can even decide if you have access to the required funding.

A broker like Accelerated Finance, on the other hand, can offer a consultation right away and quickly connect you with the appropriate lender. A quick solution and a lucrative deal will be achieved by utilizing the broker's all-of-market access to find the most sympathetic assessment criteria and contacts to lenders.

Affordability in More Complex Cases

Due to their transactional nature and predetermined goals, high-street lenders work in large quantities.

Because of this, underwriters evaluate clients using strict "tick-box" criteria and a fixed and procedural approach.

High street lenders are more cautious when it comes to any case that doesn't have a "vanilla" income structure, especially since the regulator's Mortgage Market Review (MMR) tightened lending criteria.

Private banks, on the other hand, are open to taking in a wider range of clients because their standards are much less stringent than those of their high-street counterparts.

Some private banks specialize in helping clients in specialized fields, such as law firms, entrepreneurs, private equity, sports, and entertainment. When determining income and affordability, these banks will have specialized teams that are knowledgeable about these industries.

The Use of Assets Under Management

When private banks wanted to manage some of your assets, such as cash, an investment portfolio, or your pension, they prioritized linking Assets under Management( AUM) to a mortgage.

For borrowers who were understandably hesitant to transfer assets that had already been committed elsewhere or put all of their eggs in one basket, this frequently raised red flags.

Private banks occasionally request that assets be moved to sit on their balance sheets as a trade-off because they are not constrained by the volume of business in the same way that high street lenders are. If the borrower has an investment to leverage, this naturally lowers the rate even further and can be very advantageous.

High Net Worth clients can receive asset-slicing loans from private banks when their regular income falls short of their means but they still have assets they can sell to pay for their lifestyle and mortgage services.

Bespoke Product Offerings

The service you get from private banks is one of their special selling points because it's almost always tailored to the needs of the particular client. This is contrasted with high street lenders' one-size-fits-all requirements. Working with a broker gives you access to thousands of mortgage products, which enables the broker to make your unique products.

Accelerated Finance can present your prospects to a private bank and secure individualized terms through negotiation with an underwriter.

High street lenders advertise some of the lowest rates, but they frequently charge percentage-based fees, which are particularly lucrative for banks with higher-value mortgages. On the other hand, a private bank will assist you in calculating your mortgage's total cost and provide you with access to more affordable products and services.

What Are the Downsides of Private Banks?

For borrowers with extremely complex circumstances or non-standard income, private bank mortgage loans are a great choice. Using a private bank mortgage has some drawbacks, though:

  • A private bank frequently charges higher rates and fees than a high-street lender.

  • Mortgage applications may take longer to be evaluated by private banks; frequently, opening a bank account is required.

  • Private banks may choose to lend in specific locations when lending against property, favoring prime postcodes.


This article is intended to provide a general understanding of the topic. The contents should not be treated as advice.

Accelerated Finance Limited only considers applications for commercial or investment properties.

Accelerated Finance Limited is not regulated by the financial conduct authority and only provides unregulated loans via our network of lenders. Your property is at risk if you fail to make payments on a Mortgage Contract. Please note that Accelerated Finance Limited and its employees do not give financial advice or recommendations on any product.

Author: Aakash Nagrani - Director 

Aakash Nagrani Author
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