Mortgage broker messed up
Discussion
We arranged for our mortgage to switch to a new product (same lender) on 1st April through a large, well‑known broker. Everything was completed back in February and we were told there was nothing left to do, the new rate would automatically take effect on 1st April.
When I logged in yesterday, I found we’d been moved onto the lender’s SVR instead. I called the lender, who had no record at all of the product switch. I then contacted the broker, who investigated and admitted they had made an error.
As things stand, we’re stuck on the SVR until at least 1st May. It also looks likely that the lender may no longer honour the original rate we secured (the broker is trying to get them to, but it’s not guaranteed). The broker acknowledged all of this and, without any prompting, raised the topic of compensation and outlined what they expect to reimburse.
I’ve calculated that we’re paying around £6 per day in additional interest compared with the product we should have switched to. If we end up on a worse rate than originally agreed, the financial impact will continue for the rest of the mortgage term. Our monthly payments have also increased by over £100 compared to our switch deal and while this will reduce if we eventually move to a better rate, if we don’t get the original product, the payments will remain higher than planned.
What I’d like advice on is what should I be asking for?
My starting point is that we should be put back into the position we would have been in had the switch happened correctly, so all additional interest refunded. The broker mentioned covering the difference in monthly payments, but I would have thought reimbursing the extra interest would account for that? Would we also be entitled to some level of compensation for the inconvenience and stress caused?
When I logged in yesterday, I found we’d been moved onto the lender’s SVR instead. I called the lender, who had no record at all of the product switch. I then contacted the broker, who investigated and admitted they had made an error.
As things stand, we’re stuck on the SVR until at least 1st May. It also looks likely that the lender may no longer honour the original rate we secured (the broker is trying to get them to, but it’s not guaranteed). The broker acknowledged all of this and, without any prompting, raised the topic of compensation and outlined what they expect to reimburse.
I’ve calculated that we’re paying around £6 per day in additional interest compared with the product we should have switched to. If we end up on a worse rate than originally agreed, the financial impact will continue for the rest of the mortgage term. Our monthly payments have also increased by over £100 compared to our switch deal and while this will reduce if we eventually move to a better rate, if we don’t get the original product, the payments will remain higher than planned.
What I’d like advice on is what should I be asking for?
My starting point is that we should be put back into the position we would have been in had the switch happened correctly, so all additional interest refunded. The broker mentioned covering the difference in monthly payments, but I would have thought reimbursing the extra interest would account for that? Would we also be entitled to some level of compensation for the inconvenience and stress caused?
Inconvenience & stress...... WOW.
Just be happy that they seem to be trying as hard as they can, if they don't achieve it, then they will need to reimburse you for your costs & additional payments.
I am assuming they are FCA approved/backed?
Can I ask, if you are staying with the same lender, why did you go through a broker?
I have lost count of the times I "switched deals" with the same lender back when I had a mortgage & it was always REALLY simple to do, the last couple were all done online with zero issues. I have no idea why you would want to introduce an extra level of complexity.
Just be happy that they seem to be trying as hard as they can, if they don't achieve it, then they will need to reimburse you for your costs & additional payments.
I am assuming they are FCA approved/backed?
Can I ask, if you are staying with the same lender, why did you go through a broker?
I have lost count of the times I "switched deals" with the same lender back when I had a mortgage & it was always REALLY simple to do, the last couple were all done online with zero issues. I have no idea why you would want to introduce an extra level of complexity.
Thanks. We didn't pay a fee, but I know the lender was charged one by the broker. Since the switch never actually happened, I m not sure whether they've been paid or not.
The real issue is the rate. If they can t honour the original deal, which we secured before rates jumped because of the situation in Iran, then we re looking at a much bigger financial hit. That s the difference between losing a few hundred pounds and losing a few thousand. If it ends up being just one month on the SVR before moving onto the previously agreed rate, it's not so bad.
What s frustrating is that I had a feeling they were going to mess this up, which is why I checked on the day of the switch. I really do need to start trusting my sixth sense.
EDIT: I hadn’t realised we’d be staying with the same lender. The broker reached out because we used them previously, and after reviewing everything they ultimately advised sticking with the current lender.
Also, inconvenience and stress are real factors. Maybe others don’t mind being messed around, but I’ve got plenty to deal with already. If there’s something on offer, I'll gladly take it, but I’m not spending my time fighting for it.
The real issue is the rate. If they can t honour the original deal, which we secured before rates jumped because of the situation in Iran, then we re looking at a much bigger financial hit. That s the difference between losing a few hundred pounds and losing a few thousand. If it ends up being just one month on the SVR before moving onto the previously agreed rate, it's not so bad.
What s frustrating is that I had a feeling they were going to mess this up, which is why I checked on the day of the switch. I really do need to start trusting my sixth sense.
EDIT: I hadn’t realised we’d be staying with the same lender. The broker reached out because we used them previously, and after reviewing everything they ultimately advised sticking with the current lender.
Also, inconvenience and stress are real factors. Maybe others don’t mind being messed around, but I’ve got plenty to deal with already. If there’s something on offer, I'll gladly take it, but I’m not spending my time fighting for it.
Edited by Wackywoo105 on Thursday 2nd April 13:40
Surely they just need to ensure you are put back into the same Financial position as you would have been had the switch been put through as agreed.
Anything on top would obviously be a bonus but mistakes happen.
At this stage I’d be ensuring they have agreed to the financial part but I wouldn’t be requesting stress or inconvenience and then see if they offer something for that.
Anything on top would obviously be a bonus but mistakes happen.
At this stage I’d be ensuring they have agreed to the financial part but I wouldn’t be requesting stress or inconvenience and then see if they offer something for that.
It always surprises me when people push back on the idea that stress and inconvenience should be compensated.
The customer did their part: arranged the deal, completed the paperwork, and relied on the broker’s assurance that the switch would happen automatically. When the service provider fails to deliver what was agreed, the customer then has to spend additional time chasing, clarifying, and trying to resolve a problem they did not create. That is, by definition, inconvenience, and it can also be stressful. Expecting some recognition of that feels reasonable.
The primary objective should of course be to put the customer back into the financial position they would have been in had the error not occurred. For example, if a 5% fixed rate for five years was agreed, but due to the broker’s mistake the borrower ends up on a 6.5% rate, it would be reasonable to expect the broker to cover the 1.5% difference in costs for the relevant period until the situation is corrected or the next remortgage opportunity arises.
In addition to direct financial losses, a modest payment to reflect the time spent resolving the issue would not be unreasonable. While mistakes do happen, the consequences should not fall on the customer.
The customer did their part: arranged the deal, completed the paperwork, and relied on the broker’s assurance that the switch would happen automatically. When the service provider fails to deliver what was agreed, the customer then has to spend additional time chasing, clarifying, and trying to resolve a problem they did not create. That is, by definition, inconvenience, and it can also be stressful. Expecting some recognition of that feels reasonable.
The primary objective should of course be to put the customer back into the financial position they would have been in had the error not occurred. For example, if a 5% fixed rate for five years was agreed, but due to the broker’s mistake the borrower ends up on a 6.5% rate, it would be reasonable to expect the broker to cover the 1.5% difference in costs for the relevant period until the situation is corrected or the next remortgage opportunity arises.
In addition to direct financial losses, a modest payment to reflect the time spent resolving the issue would not be unreasonable. While mistakes do happen, the consequences should not fall on the customer.
silencepoint said:
It always surprises me when people push back on the idea that stress and inconvenience should be compensated.
The customer did their part: arranged the deal, completed the paperwork, and relied on the broker s assurance that the switch would happen automatically. When the service provider fails to deliver what was agreed, the customer then has to spend additional time chasing, clarifying, and trying to resolve a problem they did not create. That is, by definition, inconvenience, and it can also be stressful. Expecting some recognition of that feels reasonable.
The primary objective should of course be to put the customer back into the financial position they would have been in had the error not occurred. For example, if a 5% fixed rate for five years was agreed, but due to the broker s mistake the borrower ends up on a 6.5% rate, it would be reasonable to expect the broker to cover the 1.5% difference in costs for the relevant period until the situation is corrected or the next remortgage opportunity arises.
In addition to direct financial losses, a modest payment to reflect the time spent resolving the issue would not be unreasonable. While mistakes do happen, the consequences should not fall on the customer.
Yes, absolutely, the financial services industry calls it D&I - distress and inconvenience. It’s quite routine in a complaint that has some basis to it. The customer did their part: arranged the deal, completed the paperwork, and relied on the broker s assurance that the switch would happen automatically. When the service provider fails to deliver what was agreed, the customer then has to spend additional time chasing, clarifying, and trying to resolve a problem they did not create. That is, by definition, inconvenience, and it can also be stressful. Expecting some recognition of that feels reasonable.
The primary objective should of course be to put the customer back into the financial position they would have been in had the error not occurred. For example, if a 5% fixed rate for five years was agreed, but due to the broker s mistake the borrower ends up on a 6.5% rate, it would be reasonable to expect the broker to cover the 1.5% difference in costs for the relevant period until the situation is corrected or the next remortgage opportunity arises.
In addition to direct financial losses, a modest payment to reflect the time spent resolving the issue would not be unreasonable. While mistakes do happen, the consequences should not fall on the customer.
OP - you could try a formal complaint to both the broker and lender. They would have 8 weeks to provide a final response. Then the Financial Ombudsman Service (FOS). All free to you and it may or may not yield something. Worth a try?
L&C messed up a product switch for me too, in the end we got stuck with a 2 year product instead of the 3 year he had found and at a higher rate
This was before completing, and they gave me £350 compo, which as it’s a regulated mortgage with not many on the market, didn’t make a dent in the extra interest we now pay, but didn’t have much choice
Won’t use them again though
This was before completing, and they gave me £350 compo, which as it’s a regulated mortgage with not many on the market, didn’t make a dent in the extra interest we now pay, but didn’t have much choice
Won’t use them again though
You should be put in the same position. It's important to calculate this off the interest rates being charged, not your monthly payments, as if you're on a 4% interest rate and your monthly payment is £1000 you are paying off more capital than if you're on a 5% interest rate and the repayments are £1100 (assuming the mortgage end date is the same). The higher your interest rate the more rear-loaded the capital payments are.
If the broker denied all responsibility and the increase in payments put you on the breadline for months while you sort it out I can see some stress and inconvenience being caused. But sounds like this has been known about for two days and the broker is already aiming to fix it either through sorting the rate or compensating (or a combination) so I’d wait and see how it pans out before claiming more than the financial cost.
Can’t help but agree with the above, unless I was actually moving house and needed a bigger mortgage don’t think I’d go near a broker again. Product transfer must be one of the easiest things you can do, they don’t even need any paperwork just the click of a button.
Hope you get it sorted though.
Can’t help but agree with the above, unless I was actually moving house and needed a bigger mortgage don’t think I’d go near a broker again. Product transfer must be one of the easiest things you can do, they don’t even need any paperwork just the click of a button.
Hope you get it sorted though.
Thanks again everyone.
I've put together a spreadsheet to calculate everything properly. If we stay on the SVR for one month and then switch to the best available product, which is now 1.4% higher, the additional interest over the lifetime of the mortgage comes to roughly £3,000. The extra monthly payments we'd have to make total around £2,300, but ultimately it's the extra interest that really matters.
I'm also going to request the money needed to ensure we can still exit the mortgage at the original end date. Six months before the original product was due to finish, I'll start a new application to lock in a rate. If something similar to the recent situation happens again and rates rise by the time we're six months from the end of the new product, we'd be facing yet another multi-year financial hit. I'm not willing to let that happen twice.
I've put together a spreadsheet to calculate everything properly. If we stay on the SVR for one month and then switch to the best available product, which is now 1.4% higher, the additional interest over the lifetime of the mortgage comes to roughly £3,000. The extra monthly payments we'd have to make total around £2,300, but ultimately it's the extra interest that really matters.
I'm also going to request the money needed to ensure we can still exit the mortgage at the original end date. Six months before the original product was due to finish, I'll start a new application to lock in a rate. If something similar to the recent situation happens again and rates rise by the time we're six months from the end of the new product, we'd be facing yet another multi-year financial hit. I'm not willing to let that happen twice.
Ideally the broker needs to pay you every penny of the “ worse deal “ that it costs you with the higher interest rates due to their error and / or get you the current best deal with the original desired timeframe with then any extra costs being down to them.
This would be making good their error and not compensation per se.
Even at this early stage of this I’d be very wary of using them again though once all sorted !
This would be making good their error and not compensation per se.
Even at this early stage of this I’d be very wary of using them again though once all sorted !
DavePanda said:
GasEngineer said:
Odd comment.
Is it though? How much stress do you get from someone making a mistake? Do you have sleepless nights, nervous breakdowns or similar (those would actually be stressful) or do you make a few phone calls and get it sorted like the OP has? Wackywoo105 said:
Thanks again everyone.
I've put together a spreadsheet to calculate everything properly. If we stay on the SVR for one month and then switch to the best available product, which is now 1.4% higher, the additional interest over the lifetime of the mortgage comes to roughly £3,000. The extra monthly payments we'd have to make total around £2,300, but ultimately it's the extra interest that really matters.
I'm also going to request the money needed to ensure we can still exit the mortgage at the original end date. Six months before the original product was due to finish, I'll start a new application to lock in a rate. If something similar to the recent situation happens again and rates rise by the time we're six months from the end of the new product, we'd be facing yet another multi-year financial hit. I'm not willing to let that happen twice.
Why use a broker to move to another offer from your existing provider? Normally just an online click process?I've put together a spreadsheet to calculate everything properly. If we stay on the SVR for one month and then switch to the best available product, which is now 1.4% higher, the additional interest over the lifetime of the mortgage comes to roughly £3,000. The extra monthly payments we'd have to make total around £2,300, but ultimately it's the extra interest that really matters.
I'm also going to request the money needed to ensure we can still exit the mortgage at the original end date. Six months before the original product was due to finish, I'll start a new application to lock in a rate. If something similar to the recent situation happens again and rates rise by the time we're six months from the end of the new product, we'd be facing yet another multi-year financial hit. I'm not willing to let that happen twice.
What term is associated to the new product? When you use lifetime do you mean offer term?
As I mentioned earlier, I hadn’t realised we would be staying with the same lender. The broker got in touch because we’d used them previously, and after reviewing everything they ultimately advised remaining with the current lender. They were the same broker who arranged the previous product with that lender, so I didn’t anticipate any issues. In hindsight, I do wish I had simply thanked them and gone direct.
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