What are brokers advising their clients ahead of Christmas?

As the Christmas break looms, many borrowers across the UK will be intending to tie up any business with their mortgages to give them peace of mind over the holidays.

So, what are brokers advising their clients amid this busy period? Mortgage Introducer reached out to a number of advisers to find out.

What are brokers advising borrowers right now?

Simon Bridgland (pictured), broker and director at Release Freedom, said his advice to clients is for them to plan their budgets appropriately.

“Clients must map out all income and outgoings; and if necessary, cut any non-essential payments, it is always surprising how many small direct debit payments are lurking about,” he said.

Bridgland added that clients must also review their general insurances and be ready to change provider to get a better deal, the same applying to utilities.

“It is important clients consider every detail, such as whether they need to pay so much for a mobile phone, make a packed lunch, buying less coffee each day, and working out at a park rather than a gym,” he said.

While the role of a broker is essential to helping clients understand the importance of these financial decisions, he said, greater financial education in schools would help to get the message embedded at an earlier age.

“My best advice would be to see a broker sooner rather than later; consider a six month switch to interest-only under the new mortgage charter, as it could give you enough breathing space to clear some personal debt or save,” he said.

What is the advice for clients on interest rates?

Ross Lacey, director and chartered financial planner at Fairview Financial Management, said for many people coming off fixed rates over the coming months, they will already have a good idea of what their new monthly payments will look like.

As fixed rates have gradually come down recently, he added that things may not be as bad as they initially expected, however monthly payments are almost certainly going to be more than what they currently pay.

“Our advice to our clients in this position has been to extend the term of their mortgage if possible, reduce their loan-to-value (LTV) to secure the best rate available, and, in some cases, move over to an interest-only deal,” he said.

Lacey added that his business has also helped clients look at other areas of household expenditure that could be reduced to re-allocate that budget towards mortgage payments.

David White, chief operations officer at Simply Lending, said customers transitioning from their two-year fixed rates prior to the holiday season could face rate hikes of up to 5%.

This, he added, could equate to an added £350 monthly on typical mortgage payments, with certain homeowners potentially experiencing even greater impacts.

“I strongly recommend that those impacted consult with their lender or engage with a certified mortgage adviser before making definitive decisions,” White said.

While higher rates are the new normal, he said, strategies remain available for clients to manage and stabilise their monthly payments, which is an area brokers will be able to advise on ahead of the Christmas break.

What are you advising your clients at present ahead of the Christmas break? Let us know in the comment section below.