UHNW Mortgages Explained: Private Bank & Asset-Backed Options
In the UK, the term “Ultra High Net Worth Individual” typically refers to someone with net assets of £30 million or more, although definitions can vary slightly between financial institutions and wealth managers. This figure excludes primary residence and liabilities in some interpretations, while others include all global assets depending on who’s viewpoint it is.
To compare:
- High Net Worth (HNW) individuals usually have assets of £1 million–£5 million.
- Very High Net Worth (VHNW) is often defined as assets of £5 million–£30 million.
- Ultra High Net Worth (UHNW) begins at the £30 million+ mark.
The UHNW bracket often includes successful entrepreneurs, senior executives, investors, celebrities, and families with generational wealth.
Why Would a UHNW Individual Need a Mortgage?
You might assume someone with significant wealth would simply buy a property outright. And while that’s certainly possible, many UHNW individuals opt for mortgages for strategic and financial planning reasons. Some common motivations include:
- Liquidity management – Keeping capital invested rather than tying it up in property giving them a higher return on deployment of capital in other avenues.
- Tax planning – Mortgages can play a role in inheritance and income tax strategies and UHNW individuals usually have access to skilled financial planners trying to utilise the best methods for them.
- Leverage – Borrowing against property allows for greater flexibility in asset allocation.
- Diversification – Even UHNW individuals may want to spread exposure across multiple property types and geographies using leverage.
In short, a mortgage isn’t about affordability at this level, it’s about financial optimisation, so although not all UHNW individuals would want to use one, they make sense to some.
Find out Your Options
Mortgage Options for UHNW Individuals
Traditional high street lenders often have set income multiples, standard affordability models, and capped loan-to-value (LTV) ratios, which may not suit UHNW clients. However, there are specialist lenders, private banks, and boutique financial institutions that cater specifically to this demographic with bespoke solutions.
Private Bank Mortgages
Private banks are often a solution for UHNW clients. These lenders can potentially offer bespoke lending terms based on your overall asset portfolio and long-term relationship with the bank, not just income.
Key features:
- Flexible underwriting not based on salary multiples.
- Interest-only or bespoke repayment structures.
- Ability to potentially use non-traditional income sources (e.g. dividends, trust income, carried interest).
- In some circumstances, the option to cross-collateralise with other assets held at the bank (securities, deposits, etc.).
Asset-Backed Mortgages
These mortgages are secured not only against the property being purchased, but also against other high-value assets such as:
- Investment portfolios
- Luxury vehicles
- Art collections
- Yachts
- Business holdings
This structure allows UHNW clients to maintain liquidity and access larger loan amounts without disrupting their investment strategy. Few lenders offer this but it can be considered by some private banks, for instance, offering Lombard loans against securities to use the funds to purchase property.
Interest-Only Mortgages
Interest-only options are common at this level, particularly where:
- The borrower has significant assets but variable income.
- The intention is to repay the loan from asset sales, bonus payments, liquidity events or downsizing which is usually viable due to the value of the property.
Private and high street lenders are often comfortable with this approach, especially when the borrower has a clear exit strategy that meets their lending criteria.
Key Considerations for UHNW Borrowers
Even with wealth on your side, there are still important factors to think through when securing a mortgage.
Ownership Structures
UHNW individuals often use sophisticated ownership structures to hold property, including:
- Trusts (UK or offshore)
- Limited companies (especially for investment property)
- Special Purpose Vehicles (SPVs)
The right structure can provide tax benefits, asset protection, and succession planning advantages but it also affects mortgage eligibility and lending terms.
Income vs Assets
Lenders will consider your wealth profile holistically. You might not have a regular PAYE salary, but you could have:
- Large dividend income
- Significant capital gains
- Trust distributions
- Rental income
- Future expected liquidity events
Specialist lenders understand this and will assess your financial footprint accordingly. It’s less about income multiples and more about sustainability and wealth trajectory. Some may even be willing to use your liquid assets as an income on the basis they could be sold with the sale proceeds covering lifestyle costs throughout the mortgage term.
Credit Profile
Even wealthy clients need to have a suitable credit history. Lenders will still check:
- Credit score
- Previous borrowing and repayment history
- UK residency or domicile status (especially relevant for foreign nationals or returning expats)
That said, credit blemishes are not always deal-breakers. With the right structuring and security, some lenders can remain flexible if they see value in the deal overall.
Tax Implications
At the UHNW level, tax planning is often integrated into property finance decisions. This can include:
- Inheritance tax mitigation (especially with family homes or investment properties)
- Stamp Duty Land Tax (SDLT) planning
- Capital Gains Tax (CGT) on property disposals
- Non-domicile status considerations
It’s important to coordinate with your accountant, legal adviser, and mortgage broker to ensure your mortgage complements your overall tax strategy. Your mortgage adviser cannot give advice on tax.
How Kerr & Watson Can Help
We understand that UHNW individuals need more than a one-size-fits-all solution.
That’s why we:
- Work closely with private banks and specialist lenders offering bespoke lending solutions.
- Take the time to understand complex income structures.
- Can liaise with your legal and tax advisers to ensure parties are on the same page.
Whether you’re purchasing a £10 million townhouse in Kensington, refinancing a country estate, or acquiring a London investment portfolio, we would like to help you.
Final Thoughts
Ultra High Net Worth individuals in the UK have different needs when it comes to property finance.
Traditional lending may not cater for the complexity of their income, asset structures, and long-term planning goals.
With the help of a specialist broker like Kerr & Watson, you can understand the options available to you.
Get in touch today to arrange a consultation.
