To mark Stress Awareness Month this April, Trussle surveyed 2,000 UK mortgage borrowers, asking them which parts of buying a home were most stressful. One in five (20%) said there was too much paperwork involved in the initial application and subsequent remortgage process, while 15% claimed the industry’s prevalent use of jargon was the main issue.
When asked what could be done to reduce stress levels, a large number of customers wanted mortgages to become more digital. Three quarters (73%) said lenders should be legally required to make their outstanding balances accessible online, while 70% wanted a downloadable mortgage statement (generally posted by lenders once a year).
Because paperwork can be so time-consuming, some borrowers risk lapsing onto their lender’s high-interest Standard Variable Rate (SVR) deal while attempting to remortgage. This can cause significant financial damage. For example, until a home owner has sent their annual mortgage statement to their new lender - along with personal documents such as their passport - they won’t be able to switch. It can take up to six weeks to replace a lost annual mortgage statement. In this time, the average customer lapsing onto their lender’s SVR would pay almost £400 more a month.
In an experiment involving one of the Big Six lenders and a local conveyancing firm, Trussle found that a mortgage customer was required to deal with 219 sheets of paper to complete their home purchase. Applied to each of the UK’s 1.5 million new mortgage customers in 2017, this would amount to 328 million sheets of paper, requiring around 38,600 trees to be felled.
Ishaan Malhi, CEO and founder of Trussle, said: “I’ve experienced the frustration of struggling to secure a mortgage first-hand. There‘s too much jargon, too much complexity, and not enough transparency. Millions of people lose out not only financially, but emotionally as a result. Your mental health is no less important than your financial or physical health, so I’d like to see modern brands working hard to reduce the friction and stress of their products and services.
The mortgage sector has traditionally been one of the worst offenders, with 40% of borrowers finding the process stressful and a third sitting on the wrong mortgage, collectively spending £15bn a year too much on interest as a result.
If service providers focus on making the overall user experience simpler, more intuitive, and accessible, hurdles will be reduced and many people are going to save money in the process.”
