Coutts mortgages vs high street bank mortgages
Page edited and updated 22/11/2024
Coutts Private Bank has been offering some of its most competitively priced rates for quite some time, but there are still cheaper mortgages available through its high-street competitors.
Since the cost of funding mortgages has reduced and lenders started passing on lower rates, Coutts' mortgages have come down in price. The private bank provides mortgages for clients seeking £1 million+ to purchase or remortgage prime properties.
Fixed rates have increased again after the Budget, but they are expected to reduce next year in line with the anticipated Bank of England base rate reductions.
View our £1 million+ best buy table.
Why would you use Coutts to get a mortgage?
If your financial situation is complex and your income is generated through a trust or an offshore account, it is probably best to secure a mortgage through a private bank like Coutts. However, if your finances are more straightforward, maybe you work in the UK or run your own company, you'll probably get a much cheaper rate through another lender.
Trinity Financial has access to high street banks and building societies offering fixed large mortgage loans starting at 4.17%. These lenders are giving the private banks a run for their money.
Aaron Strutt, product director at Trinity Financial, says: "One building society is offering a five-year fix at 4.09% for mortgages between £300,000 and £5 million. Like Coutts, it does not require assets or investments as part of the process and works with high-net-worth clients. The 4.09% rate has a £1,499 arrangement fee on its fixed rates, rather than a 0.25% or 0.5% fee, and has a specialist large loans broker desk. The lender has a reputation for producing fast mortgage offers. Other lender's two-year fixes start from 4.2%."
£1 million and £2 million mortgages through Coutts
When writing this article, Coutts' most competitively priced residential five-year fixed rate was 5.16%, roughly 1% more expensive than some lenders. It is typically available to borrowers with a 40% deposit and has a 0.5% arrangement fee. The overall cost for comparison is 6.6% APRC, and after the initial fixed rate, the mortgage reverts to the bank's current variable rate of 7.25%.
The minimum term is five years, and the maximum is 25 years. Coutts offers a two-year fixed rate of 5.25%, while the ten-year fixed rate is 5.14%. Again, these rates have a 0.5% arrangement fee. With a 15% deposit, the Coutts lowest two-year fix is 5.45%.
Could I get a cheaper £1 million+ mortgage through one of Coutts competitors?
Banks and building societies are still keen to attract wealthier clients and issue larger mortgage loans. High street lenders have larger specialist loan departments to undercut private banks.
The monthly repayments on a £2 million mortgage through Coutts on its 5.16% five-year fix would be £8,600 on interest-only or £11,879 on full capital repayment over a 25-year term.
With a lender like Nationwide for Intermediaries on its large loan special five-year fixed rate at 4.09%, the monthly repayments are lower at £6816.67 on interest-only or £10,656.38 on full capital repayment, again over a 25-year term. If you increased the term to 30 years, the monthly repayments would be £9,652.37 on capital repayment.
The bank may well accept the sale of additional homes or buy-to-let properties as an interest-only repayment vehicle, other investments, or potentially future bonuses.
Different mortgage desks to cater for wealthy clients like bankers, entrepreneurs and high-net-worth international buyers
Trinity Financial's brokers have access to Coutts mortgages and regularly help our clients secure large loans through private banks. They work with bankers who manage their broker desks for professionals, including entrepreneurs, sportspeople, entertainers, and international buyers.
High street lenders are also keen to help wealthier and more famous people, although they do not tend to offer higher loans with smaller deposits, like Coutts or Investec Private Bank.
NatWest for Intermediaries and Coutts are working together to provide more mortgages
Coutts is part of the NatWest Group, and lenders are working together to provide more mortgages. NatWest for Intermediaries is a well-known high-street lender with competitive fixed and tracker rates and some low arrangement fees. The idea is that if one of the banks can't help a client, they refer them between themselves.
NatWest can use borrowers' salary and net profits after tax through a limited company and complex income structures like vested stocks and shares and annual cash or deferred bonuses. The client can provide a proven and consistent track record of their income.
It is possible to ring-fence private school fees and lend on properties with non-commercial outbuildings or large acreage plots. Residential interest-only mortgages up to 75% loan-to-value are available, whereas repayment vehicles do not quite cover the interest-only amount at the point of application.
Call Trinity Financial on 020 7016 0790 to secure a large mortgage loan. Book a consultation or complete our mortgage questionnaire.
The information contained within was correct at the time of publication but is subject to change.
Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage
The vast majority of borrowers take fixed-rate mortgages, which typically have early repayment charges, but there are still some competitively priced tracker rates available to borrowers without tie-ins and discounted mortgages available without early repayment charges.
Halifax for Intermediaries recently launched some flexible tracker rates without early repayment charges. The most competitively priced tracker is 0.08% above the Bank of England base rate, and arrangement fees start from £1,499. For mortgages between £1 million and £5 million, the arrangement fee is £3,999.
Certain banks and building societies will accept income paid in foreign currency. This includes US dollars, Euros, and Swiss Francs.
Other accepted currencies include: Australian Dollar, Bulgarian Lev, Canadian Dollar, Croatian Kuna, Czech Koruna, Danish Krone, Hungarian Forint, Japanese Yen, New Zealand Dollar, Norwegian Krone, Polish Zloty, Romanian Leu, Singapore Dollar and Swedish Krona.
Some lenders will factor in currency fluctuation and take a "haircut", so the amount you can borrow may be reduced.
The lowest deposit borrowers need to access a £3 million mortgage is likely to be 10%.
Many lenders require a 40% deposit to access the most competitively priced mortgage rates; however, not all our clients want to put down such a large deposit.
Trinity Financial has access to one private bank that issues £3 million mortgages to wealthier clients earning over £300,000 yearly or with £3 million in net assets and 10% deposit mortgages.
As part of the mortgage, lump-sum overpayments will be written into the contract to bring down the loan-to-value, particularly if the mortgage is taken on interest only.
Trinity Financial's mortgage brokers have access to a range of lenders offering £1 million+ mortgages with generous income multiples.
Each bank or building society uses different affordability calculations to determine the maximum loan. The amount you can borrow changes depending on your earnings, deposit size, and credit score.
Most lenders have a maximum income multiple for larger loans of between four and five times the applicant(s) salary. Increasingly many will lend up to 5.5 times single or joint incomes.
A very limited number of providers offer up to six times salary mortgages, providing applicants have a limited amount of personal debt.
Private banks can structure deals for higher earners and asset-rich clients to suit individual needs.
Trinity Financial specialises in arranging large mortgage loans, and our team of expert mortgage advisers and their assistants do everything possible to secure the cheapest rates and the fastest mortgage offers.
We have access to the decision-makers at the lenders offering the leading large loan rates and provide our clients with a first-class service.
We regularly work with clients over the phone to discuss applications and confirm the documentation we will require, and we also have offices in St James's and Islington where we meet clients.
Click here to view some of the mortgages we have arranged over the last 15 years.
It is all down to price. While many wealthier clients like having a relationship with private banks, in many cases, they are paying for the privilege.
High street lenders worked out some time ago that issuing larger mortgage loans does not have to be a complex process. By targeting clients looking for £1 million+ mortgages, they could issue one mortgage or ten smaller £100,000 mortgages. Often, the same level of work goes into getting smaller and larger mortgages agreed.
Bigger lenders like HSBC, Barclays, Santander, Halifax, and TSB are all keen to issue larger loans, and they often offer enticing rates to tempt wealthier clients. Smaller building societies also offer surprisingly large mortgage loans.
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