A VERY wealthy client has just been on the phone to me grumbling about the latest quarter of a percent. He has a mortgage, and he's concerned about the increase in interest payments he will face. I think he expects me to do something about it, although exactly what influence he imagines I have with the Bank of England I'm not clear.
It may seems strange that the rich use mortgages, but really it's just a way for them to get hold of more money to invest - at a cost of only a little over five percent (or rather, as of next month, five and a quarter percent). This particular client has an eighteen million quid mortgage (it is a very large house, on a very large estate). Does that make you feel better about yours? As a result of this rate rise, he'll have to fork out an extra £45,000 a year. The pain! The hardship! Of course, if I told you what his pre-tax investment profits were last year, you wouldn't feel quite so sorry for him.
Luckily he didn't notice the immediate fall in the market when the rate rise was announced at noon, or he might have given me grief about that as well. By the time he called there had already been a full recovery (which of course, I did my best to claim credit for).
Anyway, he wants me to find him a cheaper mortgage. I shall of course go through the motions - send him lots of useless offers from other institutions - until he is either convinced that our in-house product remains the best value... or else he is too dazed by all the papers to bother with it any further. What's £45,000 extra a year, after all?
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