by Mark Johnston
Whilst the majority of the UK population prepare for tough times ahead following the recent government spending review, some are a lot more fortunate. A private bank who looks after very wealthy customers have just launched a £1 million mortgage. The mortgage is probably aimed at those bankers who are still getting hefty bonuses even in the mist of a financial crisis. Before we start to demonise these bankers, lets not forget that these are the investment bankers that earn their companies millions of pounds and not the average bank clerk on £12,000 a year hoping to get a £500 annual bonus.
The private bank, Investec have launched the £1 million mortgage product which offers those lucky individuals mortgages of upwards of a cool million so long as they are worth at least £3 million. This probably means that not only will the bank take into account earnings, they will also look at property, savings and investments.
A spokes person for Investec Private Bank, Jack Jones said: “We expect our product to be particularly popular among City professionals, many of whom are set to receive sizeable bonuses over the coming months as part of their overall remuneration packages. A number of these individuals struggle to get mortgages and other personal loans approved, as many banks are geared towards far less flexible lending criteria and are not easily able to create bespoke offerings for individual clients.”
The mortgage product has been launched off the bank of large bonus expectations in the city. Around 75% of city bankers are hoping for bonuses larger than what were paid out last year although the business secretary Vince Cable trying his hardest to curb payments and even threatening banks and even threatening banks with new taxes if they don’t tow the line.
The total bonus pot is set to be around £7 billion this year, with many high end retailers and estate agents hoping for a spending spree when bankers get their bonuses between Christmas and March.
Those looking for slight more modest mortgages should get out onto the highs street with many lenders planning January sales this year. In the meantime there are some great deals from the likes of Santander, First Direct and the Yorkshire Building Society.
Top of the tables is the Spanish bank, Santander. They are offering a two year fixed rate deal at 2.65% with a fee of £1995. The loan to value is quite high at 60% so the deposit on a £150,000 loan would be £60,000. Cost for comparison is 4.2% APR.
Next up is First Direct, HSBC’s telephone bank. They are currently offering a 2 year fixed rate deal for 2.69% but their fee is just £999 which brings down the cost for comparison to just 3.7% APR. The loan to value is also a little better at 65% so the required deposit would be 35% of the value of the home.
Lastly the Yorkshire Building Society who have been at the top of the mortgage best buy tables for sometime. Their two year fixed rate mortgage is priced at 2.89% with APR of 4.7%. The fee is even less than the others at just £495. This mortgage also has a more manageable loan to value of 75%.
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