Aimed primarily at borrowers who work in the City, Investec has launched the mortgage offering for borrowers who earn in excess of £300,000, with the majority of this obtained through bonuses.
The organisation stated that the mortgages would be available from £500,000, and could be used for the purchase or remortgage of a property.
Wayne Preston, spokesperson at Investec, suggested that its research, which indicated that over 3,000 people would achieve bonuses of over £1 million, showed that the extreme mortgage had a large target audience.
He said: “Our research shows that there are over 104,000 people in the UK with an annual income of at least £200,000 and many of them will receive substantial bonuses. If they can provide strong evidence of the type of bonuses they can expect, we are prepared to develop a loan for them that takes this into account.”
However, with the Financial Services Authority (FSA) continuing its drive to try and improve record-keeping, Preston admitted that the product would require strong risk management and would look at the client’s track record of meeting payments, as well as the flexibility required due to their bonus payment structure.
Andy Pratt, chief operating officer at Alexander Hall, said he believed that high net worth clients were unlikely to go direct to a lender due to time constraints.
He commented: “Woolwich launched a similar product to this at the end of 2006 for the 2007 market to attract those City workers who were on large salaries and who could expect big bonuses, but these clients use mortgage intermediaries as they are usually short of time so need advice. Lenders are unlikely to attract this type of client directly.”
Pratt added: “It really depends on what Investec is looking for with this product; whether it’s large loan mortgage customers or cross-selling opportunities. I tend to think that it is more likely to be the latter.”
