Coutts mortgages vs high street bank mortgages
Page edited and updated 02/02/2024
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 was reduced and lenders started passing on the low rates last month, Coutts' mortgage rates came down in price. The private bank provides mortgages for clients seeking £1 million+ mortgages to purchase or refinance prime properties.
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, you'll 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 3.93%. These lenders are giving the private banks a run for their money.
Aaron Strutt, product director at Trinity Financial, says: "One bank is offering a five-year fix at 3.99% for mortgages between £1 million and £5 million. Like Coutts, it does not require assets or investments as part of the process and works with high-net-worth clients. It has a £999 arrangement fee on its fixed rates, rather than a 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 at 4.17%."
£1 million and £2 million mortgages through Coutts
Coutts most competitively priced residential five-year fixed rate is 4.99%. It is typically available to borrowers with a 40% deposit and has a 0.5% arrangement fee. The overall cost for comparison is 6.8% APRC, and after the initial fixed rate, the mortgage reverts to the bank's current variable rate of 7.75%.
The minimum term is five years, and the maximum is 25 years. Coutts offers a two-year fixed rate of 5.29%, while the ten-year fixed rate is 5.09%. Again, these rates have a 0.5% arrangement fee. With a 15% deposit, the Coutts lowest two-year fix is 5.49%.
Could I get a cheaper £1 million+ mortgage through one of Coutts competitors?
Mortgage lenders are still keen to attract wealthier clients and issue larger mortgage loans. The high street lenders have specialist larger loan departments set up to undercut the private banks.
The monthly repayments on a £2 million mortgage through Coutts on its 4.99% five-year fix would be £8,316.67 on interest-only or a higher £11,680.15 on full capital repayment. This is over a 25-year term.
The monthly repayments with a lender like HSBC for Intermediaries on its large loan special five-year fixed rate at 3.99% are lower at £6,650 on interest-only or £10,545.70 on full capital repayment, again over a 25-year term. If you increased the term to 30 years the monthly repayments would be £9,536.78 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 access 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 both 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.
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