Why Traditional Mortgage Underwriting Doesn’t Fit HNW Borrowers

High-net-worth individuals are rarely a neat fit for high street lending. Whether they receive irregular income, hold wealth in investments, or operate across jurisdictions, conventional affordability models often fall short.

In 2025, private banks continue to lead the way in underwriting mortgages based on total wealth, not just taxable income — and investment portfolios are playing a larger role than ever.

How Private Bank Underwriting Works in 2025

Private banks take a more bespoke, relationship-led approach. Rather than applying blanket affordability rules, they assess the broader financial picture, including:

• Net worth and liquidity
• Discretionary investment portfolios
• Income across trusts, SPVs, or family offices
• Global real estate or business holdings
• Long-term banking or custody relationships

This flexibility allows clients with complex or fluctuating income to secure mortgage funding based on assets, credibility, and repayment strategy — not payslips.

Using Investment Portfolios as Security

In many cases, borrowers can use investment holdings to support or even secure their borrowing. This includes:

• Pledged portfolios: assets remain invested but are pledged as collateral
• Asset drawdown models: lender assesses portfolio’s yield as de facto income
• Cash sweep facilities: interest or capital gains are used to cover loan payments
• Lombard lending: using liquid investments to secure short-term or bridging finance

Some private banks may even offer reduced interest rates for clients who move assets under management — creating a win-win for both sides.

When This Strategy Works Best

Portfolio-backed or asset-based lending is especially effective when:

• Income is unpredictable (e.g. bonuses, dividends, distributions)
• The borrower is in a low-tax or no-tax jurisdiction
• There is a need for speed, discretion, or higher LTV
• The client prefers to avoid asset sales that would trigger tax events
• Lending is needed against prime UK residential or investment property

How Willow Private Finance Can Help

We work with a broad panel of private banks, wealth-aligned lenders, and boutique finance providers who understand complex client profiles and value long-term relationships.

We support clients by:

• Packaging applications based on net worth and portfolio performance
• Introducing lending opportunities tied to custody and AUM incentives
• Structuring loan-to-value and repayment terms flexibly
• Coordinating with your wealth manager or accountant to avoid tax leakage
• Navigating cross-border rules, compliance, and risk thresholds

Whether you’re leveraging investments to purchase a property or refinancing with asset efficiency in mind, we can align the right lender and terms to your goals.

📞 Want Help Navigating Today’s Market?

Book a free strategy call with one of our mortgage specialists.

We’ll help you structure a smarter mortgage using your full financial profile.