The Ryan Review

For most of us mortals approaching our bank for a loan, we can see the interest rates we’re going to be charged upfront. They’ll be published in the newspapers, or on the bank’s website, and we will know exactly what we’ll be paying. We’ll be told if it’s a variable or fixed rate and the term, and to more or less take it or leave it. It’s easy to believe it’s this way for everyone, but you’d be mistaken.

For what the banks term ‘high net worth individuals’ and companies, the rules are different. Using their borrowing power they can usually do deals the rest of us cannot. So often their ‘interest rate’ is not something set in stone at the bank counter and is a flexible type of arrangement, subject to negotiation.

So, it really shouldn’t come as any surprise that some, especially those borrowing enormous sums that would make our eyes water, are treated more favourably than the great unwashed. After all, the asset they’re bringing to the bank’s loan book is substantially higher than ours. Yes, there are risks involved, but thems the way the cards fall and it was ever thus.

However, ordinary borrowers can also sometimes negotiate on interest, if they really want to. Nothing is more likely to make a bank uncover a more flexible attitude to selling money then thinking they’re going to lose it.

If you are a mortgage-holder with equity (at least 80pc but 50pc is better), with a nice house in a good location and what your mother would call “prospects”, you’re in a stronger position by threatening to switch your loan to another bank. It can be a game of chicken, but if you’re prepared to follow through you can get your own bank to match or better another’s advertised offer (even if it’s ‘off-book’) and save yourself legal fees and long-term interest.