Sunday Times mortgage headline

There are many mortgage products available in the market place making it difficult for the consumer to make a fair comparison on their own. Lenders will only offer advice against their product range and in many instances leave it for the borrower to decide what is best for them. This can be costly in the long run depending on any product tie-in or early exit fees. A borrower should always seek independent whole-of-market advice from a broker who can look at all lenders including the borrower's existing lender.

It's true that you 'could' get a better deal by staying with your current lender, but not the case that you 'will'. It may be that you could get a better deal going elsewhere. The safest option is to speak to a broker who can have a look at the best options that fit your circumstances to secure the best deal.

With regards to the headline, it would be advisable to make a subtle alteration from "will" to "may." Clients often do not fully comprehend the intricacies involved in a mortgage rate switch, and it is important to seek financial guidance in order to evaluate the product transfer options offered by both their existing lender and the wider market. Additionally, it is pertinent to take into account the client's future aspirations and any potential plans to move in order to identify the most appropriate deal that aligns with their financial objectives.

When looking to remortgage, you should consider all your options. That means looking to see what your current provider can offer and what is available with other lenders — and opting for the most cost-effective option. This is what any broker should be doing. Of course, sometimes it is more cost-effective to stay with your current lender but a lot of the time there are more appropriate deals with other lenders. This is why you should use a broker to ensure all options have been considered, which will ensure you are getting the very best deal for your needs and circumstances.

Making blanket statements for a market as complex as mortgages is asking for trouble. Everything depends on the client's circumstances at the time. It's certainly true that a product transfer with the existing lender could be the most suitable option, but often remortgaging to another provider is the best bet, and potentially could save thousands of pounds.

Mortgages are a specialist subject and generalisms like this should not be made. This article was sent to me by a client whose mortgage I'm reviewing and is with Barclays. However, a remortgage to Coventry Building Society saved her 0.3%. There are times when changing rate whilst staying with the same lender is both the correct and most convenient decision, but it's impossible to make a statement that applies to even a large minority of the public.

The problem I have with headlines like this is that, while the certainty of “will” gets replaced with the more correct “may” in the first paragraph, what of all the people who just read the headline? They are now likely to be entering a market with completely the wrong idea and could end up with something inappropriate for their current needs. The headline makes the assumption that the only important thing about selecting a mortgage is rate, which is wrong. What if they want to make a large overpayment, extend the term or change from interest-only to capital repayment, or they plan to move in the next couple of years? All of these additional elements need to be factored into finding the right deal. It's not just about finding the lowest rate.

This headline sets off alarm bells immediately. The reason for this is the definitives used within the wording of ‘Stick with your lender — you will get a better mortgage deal’. It clearly states that you will get a better deal. This should be changed to something more akin to "consider sticking with your lender - you might get a better deal". Though I know this isn't as attention-grabbing, someone will likely take the article at face (or in this case, headline) value and not put much more thought into it. The headline is not only problematic from an advice standpoint, but it's not factually correct.

This is a surprising headline in that it is saying you 'will' get a better mortgage if you stay with your current lender, as we know that is simply not true for everyone. Even with the change of words to 'may' if a person is skimming through the news and has had an email from their lender where they can just click a few buttons to get a new deal, they may take that headline as advice to just go with that — and they could then be losing out on a better deal. I recently had a client that was going to go with their own lender but we looked at the whole of the market and were able to save them just under £1000 over 2 years by switching so it is not always best to go to your current lender.

On an average loan of £250k with a 75% LTV borrowers can save over £250 per year, if they choose the cheapest deal, hence why we recommend borrowers seek independent mortgage advice. Borrowers have a difficult decision to make. Will rates go up again or will they go down further, and if so when. The Swap market indicates rates will go up again this year and then start to reduce in 2024.Right now mortgage rates will likely increase, 5 year swap rates have increase by 0.79% in the 3 weeks, from a low of 3.24% to 4.03% today. Therefore, should borrowers fix (if so for how long) or should they buy a tracker rate. This decision all depends on their personal circumstances. Borrowers should be seeking independent whole of market advice from a mortgage broker, whether they stay with their existing lender or not.

What these national newspapers need to realise is that this information will be taken on board by lots of people who will see this as gospel. As mortgage advisers, we already have a problem in this industry with lenders being desperate to cut us out of the market come renewal time anyway and many customers not questioning the rates they have available via product transfers.

A great example of this was a few months ago when a client had been contacted by the lender six months in advance and had gone straight onto their website and selected a five-year fixed rate even though they were planning to move at the start of this year. Porting application was declined by their lender due to the applicant no longer fitting their criteria and applicant ended up paying five years worth of Early Repayment Charges to move.

Maybe it should have said ‘Stick with your lender… if you’re a bit lazy’.
Saying vast swooping statements like ‘stick with your lender for a better deal’ needs so much caveating that you’ll quickly feel a bit dumb for saying it in the first place. It’s so lender dependent and only very occasionally true. You should speak to an adviser who will consider all options before guiding you to the most suitable solution. Convenience is a major consideration that often leads people to stay with the current lender, if I can only save you £3 per month by switching to a new lender, (involving an application and legal work) you’ll probably select the simple ‘Rate Switch option which is a work of moments with a guaranteed outcome. I’m so fed up with silly headlines like this, they’re dangerous and should be sense checked before publishing.