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Borrowers on the brink

ended 15. March 2024

A journalist at Thisismoney is planning a series of articles about mortgage borrowers on the brink. He's looking for brokers who would be willing to share horror stories (obviously anonymously) of clients who have had their lives turned upside down by higher rates or were on the brink of that happening? And how the broker advised them to try and help solve it? So basically:

  • What happened and what was the client’s situation?
  • What was the advice you gave and solution?
  • How's the client doing now?

Anything else you'd like to add, fire away.

4 responses from the Newspage community

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Ross Lacey
Director & Independent Financial Adviser at Fairview Financial Management
We've had several cases where clients were in very difficult situations with their mortgage payments set to rise and really sqeeze their budgets to the max.

In these events, we've looked to see where we can increase the mortgage term, move to interest only or even make a strategic overpament to reduce the LTV and lock in a better rate. We've also helped clients look at their budget outside of the mortgage to see where things could be re-jigged. Although not something to do without serious consideration; some clients have reduced/stopped their pension contributions temporarily in order to maximise their monthly income to make up some of the shortfall. We've also had clients take children out of nursery/reduce the days they go and make use of family for childcare to cut down on these costs!
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Dariusz Karpowicz
Director at Albion Financial Advice
One client, a young professional couple , secured a fixed-rate mortgage just before interest rate hikes. The subsequent rise translated to a significant monthly payment increase exceeding £600. Previously comfortable, they were at risk of default due to limited savings and tight finances.
We explored hardship forbearance options with their lender, potentially lowering payments temporarily. Thankfully, the lender was receptive. Additionally, we investigated extending their mortgage term to reduce the monthly burden. While not their ideal scenario, it provided crucial breathing room. Through combined efforts, including a revised budget, they've achieved temporary stability. Their situation, however, exemplifies the challenges facing many borrowers in the current climate.
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Denni Tyson
Mortgage and Protection Advisor at Henchurch Lane Financial Services
I am sure I am right to say that sadly, many of us advisors have seen horror stories, espeically when people come to you for advice. Last year, a client was referred to me due to their situation. They had taken a two year product with a lender and their mortgage increased by nearly £1,1000 per calendar month. The couple were in their mid forties and I was baffled as to why a 2 year was provided rather than a 5 year initially due to their circumstances and long term plan.

Both were public servants and the mortgage was in excess of £500,000. Personally, I thought when revieing the initial transacstion, the share of their mortgage payment to household income was too high.

The advice was to simply see if a repayment option was affordable as well as a part interest/part repayment. Despite provinding the warnings of part interest and part repayment, the couple said they had no choice.

How are they doing now? They didn't listen to my advice and said the interest rate was too high for them.
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Gary Bush
Financial Adviser at MortgageShop.com
We have the sad story of married clients, one aged 70 the other aged