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Case Study 4 – Mortgage and Family Protection - The merits of using a Mortgage Adviser


A married couple with a young daughter, he works in the retail food industry in a senior position on a healthy salary and his wife is a housewife. The CDMB adviser was recommended to the couple by an existing client who was suitably impressed with the advice he had received previously.

The purpose of the recommendation was to review their mortgage (is it portable?) and to discuss the possibility of additional borrowing as they wanted to move home as an upsizing project plus look at their protection needs.

The first client meeting was conducted late 2018 and after receiving advice, the client went ahead with the proposed sale of their home and the purchase of a bigger property. However, early 2019, the move fell through and the client was caught in two minds whether to find another property or extend their current home. An added issue was the fact that they had left it late and were now facing a move back to SVR (Standard Variable Rate) which would have doubled their mortgage payments overnight. The other dilemma to consider was the fact that their protection was inadequate given they now had a child and if they resorted to further borrowing, any policy advised at this point would be out of sync with their indebtedness in a matter of months. They needed to address all of these issues but also needed to prioritise their actions due to the impending move to SVR.


The decision was made to prevent the move to SVR, stay put and have plans drawn up to develop their property by way of extending the habitable space, arrange a further advance and once all was settled, discuss the protection issue.

To prevent the move to SVR, after having weighed up the pro’s and cons of a PT (Product Transfer with the current lender) vs the pro’s and cons of a remortgage to a different lender, the latter was chosen. The reason for this was because this initial transaction was to prevent the move to SVR but still allow for a further advance but not by way of a second charge as to do so generally causes a blended rate to apply. There was also the added consideration of having no ERC’s (Early Repayment Charges) so a further advance could take place as soon as was viable. Accordingly, a remortgage to another lender was the answer on a tracker product with no ERC’s which was both affordable and preferable to a move to SVR despite the costs of moving lender.

Towards the end of 2019, the plans for the extension had been drawn up and agreed and so it was now time to consider their next move with regard to another remortgage to another lender but this time with a further advance added of £150k with which to build the extension. The CDMB adviser was able to secure a further remortgage on a 5yr fixed rate of 1.39%, which was cheaper than the client’s original loan. This offered in January 2020 and was completed in February 2020.

The final position is that the client’s long term needs are now catered for and that they have ended up with a revised property they are now happy with, have the comfort of stability over the next 5 years with regard to their budget and have addressed their protection needs which were many.

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