Over the last six years, since the beginning of the banking crisis, the number of deals offered to high value mortgage clients has decreased. As lenders have fallen by the wayside and those that remain have become more reluctant to lend, the choice of large mortgage deals of one million pounds or more has fallen sharply.
However, research has found one area which has benefited over that time. High deposit mortgages, for people looking to borrow less than 60 per cent of their home's value, have increased significantly as lenders compete for this low-risk business.
Research from financial analysts Moneyfacts has discovered that the number of mortgage products in the 60 per cent 'loan to value' bracket has rocketed in recent years. Prior to the banking crisis high 'loan to value' mortgages of 90 per cent or more were the norm, as were high income multiples but such mortgage deals are now almost non-existent. Now that 60 per cent 'loan to value' mortgages are the norm the first time buyer market has stagnated but banks and other lenders remain keen to secure high deposit mortgage business.
While mortgage deals for first time buyers and at higher loan to values are still hard to come by, there are plenty of deals if you have a large depositof 40 per cent or more. The low risk nature of this type of borrowing has led many lenders to offer superb rates in order to attract good quality large mortgage business.
As well as high deposit mortgage deals from mainstream lenders, there are also countless more products available through private banks in the UK and overseas. High value mortgage clients who need over £500,000 at a low loan to value have a superb choice of deals right now. The Government's Funding for Lending scheme has been a contributing factor to the increased choice of deals.
However, some experts believe the government initiative is not targeting the right type of borrower; those looking for a 90 per cent loan to value, which the initiative was designed to help. The scheme effectively has just widened the choice of deals for those who already had a choice.
If you're struggling to agree a home loan, you're not alone. Banks and other lending institutions are focusing more than ever on profitable clients only and even some higher net-worth clients are feeling the effects. And, it's not just the large high street banks and building societies that are limiting the deals available. Privatebanks, which have traditionally prided themselves on establishing personal relationships with their customers, have begun to weed out the less profitable clients.
High 'loan to value' mortgages for high net worth finance clients arealso harder to obtain as some smaller banks are ceasing lending for such home loans. Fortunately, there are still some private banks with an appetite to lend to large mortgage clients and a number of London mortgage brokers have developed relationships with private banks in the UK and overseas who are still keen to lend to high net worth individuals, oftenwith extremely competitive pricing.