20% of mortgage borrowers looking to remortgage in the last 24 months have battled so much with application issues that they abandoned it altogether, according to research from fintech PEXA.
A further 28% chose to persevere, but experienced severe delays. As a result, 76% of respondents feel the remortgage process is not fit-for-purpose.
PEXA’s analysis found that consumer experiences have gotten worse since the start of the pandemic, as increased demand, combined with remote working, has put pressure on the conveyancing process, which still relies on 150-year-old processes.
Unfortunately, the issues observed within the mortgage process have directly impacted consumers’ finances and wellbeing. Of those who abandoned an attempt to remortgage, 27% reported that they missed out on a better mortgage rate as a result, 30% found it stressful, while 23% said the anxiety inducing nature of the process caused them to lose sleep.
At a time where many will be needing to lock in a competitive rate to keep their monthly mortgage outgoings under control, poor previous experiences are also affecting how consumers approach remortgaging. Close to half of recent remortgagors (47%) said that the next time they needed to remortgage they would just pick the easiest remortgage option. Also, 49% said they would most likely switch to a new mortgage with their existing lender, rather than considering if a better alternative was available elsewhere.
Consumers are seeking innovation to improve the experience of the remortgage process. When asked how they thought the process could be improved, 33% wanted it to be faster, 27% wanted a consistent process regardless of their lender, and 36% wanted greater transparency via an online portal.
James Bawa, chief executive of PEXA UK, said: “Normally a mortgage is a person’s biggest monthly outgoing and as interest rates rise, this will likely increase. With other bills – like energy and gas – also going up, most will now need to think carefully about how they can shore up their finances. Key to this is finding the right mortgage, something that’s best done by considering all the available options. Unfortunately, because so many people have experienced issues with the remortgage process over the last few years, many are being put off from doing this.
“Importantly, the entire industry is working together to provide better consumer outcomes. Part of the problem is that the process homeowners go through to remortgage is disjointed and still relies on an outdated 150-year-old conveyancing process. The pandemic exploded these underlying issues.
“In Australia – the first country in the world to create a digital process for lodgement and settlement – people wanting to remortgage could do so in just a day. We aim to bring this speed and simplicity to the UK, benefitting consumers, lenders and conveyancers alike as we launch our remortgage platform in the autumn.”
