Private banks have been among the unlikely beneficiaries of the credit crunch as high-street banks turn away wealthier consumers who want bespoke mortgages and current accounts.

Mortgage brokers say they are increasingly turning to the private sector for clients who need to borrow large amounts, or have unusual circumstances.

Private banks also offer “clever” current accounts that let you profit from currency movements, which are rare on the high street. Could you benefit from going private too?

Mortgages

Over the past six months, high-street lenders hit by the credit crunch have raised rates and increased restrictions — as well as lowering the maximum they will lend.

HSBC withdrew its top three-year fixed rate of 5.53% last week and replaced it with a rate of 5.98%, while Cheltenham & Gloucester increased rates on its mortgage range by 0.25 percentage points.

Then First Direct came back into the market but announced it would lend no more than £400,000, while Halifax and Nationwide have already capped their deals at £500,000.

However, the private banking arms of HSBC, Lloyds and NatWest are still able to offer competitive deals to the right client.

Melanie Bien at Savills Private Finance, an adviser, said: “In the past, it was always assumed that you would pay a premium for obtaining a mortgage through a private bank, but that is no longer the case.”

Savills can secure a five-year fix from a private bank at a rate of 5.44% with a fee of £395. The market-leading, high-street equivalent, from Abbey, has a rate of 5.75% and carries a £1,499 fee. It also imposes a £2m cap on borrowers and requires a minimum deposit of 25% of the value of the property.

Bien added: “Fixed rates are definitely cheaper through the private banks at the moment and the best available tracker deals tell a similar story.”

The charges imposed on borrowers are also often lower. Instead of the typical arrangement fees of £500-£1,500 charged by high-street lenders, private bank fees are more like £400.