Santander remo and ERC hit borrower hard

This is terrible, but really does show the importance of advice. I put out posts on social media constantly telling people not to panic, not to make rushed decisions and certainly not to exit deals early and pay ERCs without speaking to me or another adviser. Things never got as bad as the BBC and other news channels said it would and, as we suspected, once the dust settled, rates and lending calmed down and improved. I’ve spoken to all clients who faces rates are ending this year and next year and even up to 2026 to discuss what they can do to make things less brutal when their fixed rates end, and not one of them has exited early and paid an ERC.

It's natural for borrowers to panic at times like this, and ultimately if this client wanted to move onto that rate, which gave them peace of mind at the time, and they did it directly with the lender without advice, it is what it is. Let's not forget, at the time, there were countless stories out there comparing interest rates to levels seen in the late 80s/early 90s, so 6% may have looked very appealing. This is where a conversation with a broker could have helped avoid a panic-driven decision like this but let's be honest, nobody at that time could have predicted with any accuracy where mortgage rates would be today.

There will be many instances where people panicked last year and locked themselves in thinking the end was nigh. That is why it is important to seek professional advice, especially during turbulent times. Although none of us have a crystal ball, in my experience paying high early repayment charges to exit a deal seldom pays off and the grass is not always greener.

Anyone who has used a broker to arrange the mortgage should be advised to talk to them first, before taking these kind of decisions. Just like a bank teller would probe and ask questions if someone went into a bank to withdraw £10,000 in cash, the representative of the lender should have asked questions, to ensure they had sought advice and knew what they were doing.

This is a great example of just why borrowers need to speak to a professional adviser before they make any big decisions about their mortgage. A broker will go through all the scenarios, work out the exact potential gain or loss and offer some sensible advice. Whilst it is of course a customer's choice to take advice or not, I do think there are some scenarios where borrowers should have to take some advice before making such a financially important decision.
In an age of fast information flow and social media, it is all too easy to be caught up in the panic of a potential situation rather than being able to take a step back and review matters carefully and calmly.
That said, hindsight is a wonderful thing, and if it was important for the client at that time to pay the potential premium for a security blanket, then it could be argued that if things had turned the other way, they would be happy now rather than rueing their decision.