The last 12 months – a little reflection

This post might not be a well thought out one, it might be a little all over the place but lets see how we go…

My customer with foresight

I have been thinking about the last 12 months and it has been up and down in every aspect. Back in 2021 I was speaking to a customer who I had helped a couple of times and he told me he wanted to do a 5 year fixed rate. At 90% LTV I suggested its not the best idea and he should maybe look at a 2 year fix, get the LTV down to maybe 80% and then look at a longer term fix as rates were lower.

He told me that rates would start to go up in 2022 (well before there were any signs of this happening and he wanted to be secure… He ended up fixing in at around 3.5%, had he listened to me, his deal would be coming to an end in the next 3 months or so and we would be looking at rates of around 4.25%.

My foresight (kicked in much later)

12 months ago I could see rates were on the rise, I tied into a 5 year fixed rate on my mortgage and paid the ERC. I secured 2.5% for 5 years which again looking back was a good decision.

Lack of foresight?

What I find interesting is that I started to call a number of our customers with 12 months left to run on their mortgage to see if they wanted to secure a new deal between April and June last year and none were interested in securing a new deal early and paying the ERC.

Then the mini budget came and interest rates of 6% became the norm for a couple of months. People were then calling non stop asking to secure a new deal despite the rate rise. What we actually did for these people was to secure them a new product but just to let the offer sit there. I still have one on going, his current rate is 2.5%, his original new rate would have been 6%, we are now down to 4.35%.


I can understand their view. Nobody knew the mini budget was coming, rates were going up but fairly slowly and when your mortgage broker comes trying to get you to take out a new mortgage at a higher rate and incurring charges, it can look like I am a dodgy salesman. But I was not suggesting anything I had not done myself and I also like to sleep at night.

I suppose my reflective view is that 12 months ago, people did not want to pay a 1% charge in order to secure something below 3%, but then after the mini budget people were clamouring to secure 6% and incur the 1% ERC.

I think I just find it quite interesting how perspective changes, I struggled to convince people to take out reasonable rates in a rate rising market but as soon as rates hit their peak, everyone wanted one in case it got worse – which it did not.

Just for the record, none of our customers ended up on the 6% rates, we managed to drag the offers out and get the rates down to the low 5s or even the 4s.