51% of millennials would consider taking out a mortgage with one of the new challenger banks, according to new research conducted by EDM Mortgage Support Services’ (MSS).
Just 8% said they would not consider dealing with challenger banks, which have no high street branches and only deal online. The remainder of respondents is undecided.
41% of millennials say they would be willing to use an app to buy a mortgage if one were to exist, although 31% say they would definitely be unwilling to do so. 61% of all millennials say it would be desirable if their mortgage lender were to provide an app.
25% of millennials say they would be ‘happy’ or ‘very happy’ to take out a mortgage online using a so-called robo-advice service and/or deal with an automated adviser that is based on artificial intelligence. 36% say they would be unhappy to do so and 39% were neutral or did not know.
Of those millennials willing to use an app, 59% say their reasons for doing so would include the higher speeds available. Other reasons cited include: being used to using apps (50%); the ability to arrange a mortgage at any time (41%), getting a better deal (37%), greater accuracy (15%) and the reduced risk of fraud (5%).
75% of those who would be unwilling to use an app say they think something as important as a mortgage should be explained face to face and 21% cite the risk of fraud.
Joe Pepper, managing director of EDM MSS, said: “Millennials are the most tech-savvy generation ever. While our research shows many of them still prefer to negotiate something as important as a mortgage face to face, the fact remains that technology is an inherent part of their lives.
“The digital approach of the challenger banks will increasingly appeal to them going forward and traditional lenders will have to become more digital themselves if they are to compete with the challenger banks in the longer term.”