“Brokers are not discussing tracker rates as they should,” he said. “They’re not explaining the pros and cons to a client. They’re not even being considered, and that’s right across the board. I’ve seen our brokers just talk about fixed rates, and I said, ‘Well, have you considered other things, so we’ll know whether the client’s cautious?’. The base rate’s not going anywhere, and if you’ve got no early repayment charges, a cautious person can go under a fix when they want to. If your client doesn’t want to commit to something now, you don’t have to do it straight away. You can do a tracker rate for six months and then revisit it.”
Many borrowers, he added, have simply never encountered a tracker product after 15 years of fixed-rate dominance, and react to the concept accordingly.
“Most clients don’t even know that tracker rates exist. They’ve had fixed rates for the last 15 years. So again, when you’re introducing tracker rates, they’re like, ‘Oh, well, it’s the devil spawn’. No, it’s not.”
The case for clearer consumer education
Hampton pointed to a gap in broker documentation, referencing the effect-of-a-1%-increase disclosure that used to appear on Key Facts Illustrations (KFIs) but has since been removed. The omission, he argued, makes it harder for brokers who have rarely or never recommended a tracker to explain the product’s risks clearly, and leaves clients without a concrete reference point for what a rate rise would mean in practice.