Two short stories to make you think.
- Tim and Kate? – Flexibility and a better rate
Tim asked me to carry out a mortgage review. He is a solicitor, a busy professional and realised that his current deal had recently ended, and he needed to do something about it. He hadn’t switched products with his lender because he had plans to either move or extend his house in the next 12 months and didn’t want to be tied into a deal with early repayment penalties. He felt stuck, and wanted best advice: stay on the variable rate or face exit charges later?
The outcome
If Tim had switched products himself, the only options available at that time had early repayment charges that might have cost him around £9,000 to exit early. Knowing his future plans and following our discussions I recommended a product that not only saved just over £400 a month, but also gave Tim and Kate the freedom to exit the mortgage at any time without penalty. Happy client.
- Reece: Brokers can get exclusive deals
Reece runs a thriving architecture practice in Manchester. Since his last mortgage, he had set up a limited company and his wife had left her employment to focus on their children. He called me for advice because his mortgage fixed rate deal was ending, and he was worried that his change of circumstances would make remortgaging difficult. His mortgage was with a large high-street lender.
The hidden deal
I reassured Reece that because it was a like-for-like mortgage with no increase in lending he could simply switch products with his lender. However, I asked him to call me back with the rate they quoted so I could check it. He called back. Yes, the rate they quoted would save him money, but I have access to exclusive offers with this lender, so he passed it to me to handle. Not only did he end up saving over £300 a month, but the deal I got was 20% better than if he had done it himself.
The moral of these tales? Even when you are product switching, call your broker for advice. It could save you money.