One in four people experienced a stressful mortgage application

It’s Stress Awareness Week, marking a global effort to highlight the causes and effects of stress in everyday life.

In preparation, we interviewed 2,000 mortgage borrowers from across the UK to find out about the role stress might play in their mortgage experience.

What did we learn? One in four home owners - the equivalent of 2.5 million people - experienced stress during their most recent mortgage application.

These alarming figures further clarify the need to radically improve the mortgage process for the wellbeing of home owners.

Have you been affected by mortgage stress?

To mark Stress Awareness Week, we’ll be hosting a Twitter Q&A to answer any questions or concerns you might have about the mortgage process.

Simply tweet us your questions by 1pm on Thursday 8th November using the hashtag #AskTrussle. Our team will be online to respond to your questions from 1-3pm.

The causes of mortgage stress

The people we interviewed suggested that a lack of communication and transparency from brokers and lenders are the biggest causes of mortgage worries.

Recalling their most recent mortgage application, one in seven (14%) home owners said they rarely understood where they were in the process.

A similar proportion (13%) found the way that mortgage deals were advertised was confusing.

Another stress trigger highlighted was the amount of time they had to spend making phone calls during the application process.

A quarter (27%) of borrowers would have preferred to complete the whole process online.

Of all the people we interviewed, those of first-time buyer age (25-34 year olds) were worst affected by the mortgage process:

  • One in three (33%) suffered stress during the process.
  • A quarter (25%) found mortgage deals confusing.
  • Almost one in three (29%) rarely understood where they were in the application process.
  • This group was more likely (44%) to remortgage with their current lender rather than take the time to shop around.

The cost of a negative experience

A possible consequence of a stressful mortgage application is that borrowers could be put off from the remortgage process when they come to the end of their deal’s initial period, when they’d be moved onto their lender’s high-interest Standard Variable Rate (SVR).

A recent industry report found that over two million people had been sitting on an SVR for more than six months. According to our own research, that would cost borrowers up to £1,621 in extra interest over that period.

Battling mortgage nightmares with technology

Our CEO and founder, Ishaan Malhi, commented on the research:

“Everyone knows somebody who’s had a nightmare mortgage experience. It’s therefore unsurprising that so many people shy away from the process when it comes to switching.

“The good news is that things are improving, with technology playing a key role in this progress. People can now apply for mortgages digitally in the comfort of their own home and out of office hours. They can also have their mortgage constantly monitored by algorithms which tell them when to switch to a new deal and what the best available ones are.

“Hopefully this trend will help us continue to reduce the number of people suffering mortgage stress.”

Join our Twitter Q&A to get answers to your mortgage questions or concerns. Simply tweet us your questions by 1pm on Thursday 8th November using the hashtag #AskTrussle. Our team will be online to respond to your questions from 1-3pm.

Notes

About the research Trussle interviewed 2,000 nationally representative UK mortgage borrowers in August 2018 using the research agency, Atomik.

How did we calculate the £1,621 SVR figure? Trussle’s Mortgage Saver Review revealed the average borrower pays £3,242 extra a year when lapsing onto an SVR (first of its kind sector study analysing the difference between a lender’s two-year fixed rate and SVR). Half of £3,242 = £1,621 (six months)