DUBLIN--(BUSINESS WIRE)--The "Existing Mortgage Holder Mortgages 2019: Consumer Research Report" report has been added to ResearchAndMarkets.com's offering.
This research indicates that most existing mortgage holders (EMHs) are very likely to engage in some mortgage-related actions in the next three years.
The most common action to be taken in the next three years is debt adjustment or restructuring, encompassing remortgaging and paying off all or part of the mortgage debt.
Almost half of EMHs (46%) are planning some form of debt readjustment (i.e. remortgaging the current home - 24% - making a significant lump-sum mortgage repayment but still owing money -15% - and making a final monthly payment or making a lump sum payment to pay the mortgage off - 14%). Just under one-third of EMHs are planning to move home and take out a new mortgage (22%) or port an existing mortgage (13%).
The likelihood of engaging in new mortgage activity is closely related to the social grade, peaking among the AB social grade and being the lowest among the DE social grade. Mature EMHs are the most focused on either undertaking no activity in the coming three years or taking actions to reduce and finally end their mortgage. Clearly, their prime focus is reducing their mortgage debt, i.e. continue repayments as normal, pay off a lump sum or end the mortgage. It is mainly younger EMHs who intend to purchase a property. EMHs planning to remortgage tend to be typical of all EMHs in terms of age, income and other characteristics
The findings in this report are based on a survey developed by the author, with the interviews conducted by MIS Group. Interviews were conducted among 1,109 individuals who currently own their own homes and are paying for these with a mortgage. The research was conducted in September 2019.
Among some of the other findings from the report are:
- Most EMHs -78% - have been active in the mortgage market in recent years, indicating that they will be taking recent journey experiences with them when or if they re-enter the mortgage market in the future. Based on the last action taken, the most common actions are to have purchased a new home and remortgaged although 14% purchased a second home or a BTL property the last time they took out a mortgage.
- Most EMHs want some professional help when they undertake a mortgage action. Professional support, especially handing over all the arrangements to professionals, is of above-average popularity among EMHs who plan to remortgage soon. It is also of above-average popularity among EMHs who want to reduce debt in the coming three years.
- There are three main pinch points along the typical EMH's mortgage customer journey. These occur at the Go/No Go Stage of the process (essentially being granted a mortgage and accepting its terms), the pre-purchase mortgage research stage and the legal stage (e.g. finding all the legal and financial information required to be granted a mortgage and complete a home purchase).
- The most problem-free mortgage activity is to remortgage. Buying a property is more problematic than remortgaging, especially if buying a second home. EMHs who ported an existing mortgage also ran into more problems compared with those who took out a new mortgage to purchase a home, which may suggest that those who ported only did so after running into problems trying to arrange a new mortgage.
This report aims to give clients a crucial insight into the current mindset of individuals who currently own a mortgage, some of whom may be planning to take out a new mortgage product over the coming three years. A key aspect of this report is to study how those planning a future mortgage application will approach their customer journey.
It will also contrast and compare existing mortgage holders (EMHs) who are likely to take out a new mortgage in the future and those who will not, and it will identify potential opportunities for relevant providers to grow their business. The report will further explore what mortgages EMHs have and where they may seek advice.
Key Topics Covered
1. Executive Summary
- Existing mortgage holders are very active
- And will be active again in the near future
- Meaning mortgage providers must be aware of who their customers are
- Especially if they are affluent
- The lifecycle of mortgage actions
- Existing mortgage holders prefer professional help when they act
- The five pinch points of the journey
- Which pinch less tightly if you are remortgaging
- And some problems may be self-inflicted
- Can technology improve the customer journey?
- New technology as a supplement to but not a replacement for bricks and mortar
- It's less about the medium of communication and more about how you talk
- Improving the product offer
- Don't become reactive with longer-established customers
- Because customers you don't talk to, won't talk back
- E-comms the growth preference
- The six stages of the mortgage process
- Most EMHs have recent journey experience
- Most EMHs will be putting their past experiences into action soon
- More mature EMHs tend to remortgage or keep the status quo
- Mature EMHs intend to either stay put or try to sever ties
- Affluent EMHs the most likely to act
- The lifecycle of mortgage actions
- The financial health of EMHs
- Most EMHs devote around 23% of their income to repayments
4. EMH Strategies: Getting Professional Help
- Professional help especially wanted to reduce the debt burden
- Mortgage brokers and financial advisors the main professionals trusted
- Selecting a strategy and selecting a source of information are both parts of the same process
5. The Mortgage Customer Journey: The Pinch Points
- EMHs are not novices but they can still hit roadblocks
- Remortgaging is the most problem-free activity
- Easy or hard, EMHs rate their providers highly
- Front-end problems are delaying the process
- Knowledge gaps
6. Making It Easier For EMHs
- Over 27% of mortgage holders favour comparison sites for brokers
- Around one-third of consumers, favour improved monitoring because it reduces communication strains
- Some support for easing the documentation burden but some reluctance to accept digital solutions
- Use technology but don't abandon bricks and mortar
- Personalised communications can improve the customer journey
7. Improving The Product Offer
- Fixed-term repayment mortgages appeal the most to those who will remortgage
- If approaching debt adjusters put more weight on non-price factors
- Age-related mortgage offers will be popular
- Nationwide vulnerable to mortgage finishers and Halifax to remortgagers
8. Keeping Your Customers Engaged
- Mortgage providers get less proactive as time passes
- But things may have improved
- Just under one-third of EMHs initiate contact with their provider
- Mortgage customers happy with the contact they initiated
- EMHs increasingly like e-communications but still use the good old telephone
- Al Rayan Bank
- Aldermore Bank
- Bank of Ireland
- Bank of Scotland
- Britannia Building Society
- Cheltenham & Gloucester
- Clydesdale Bank
- Co-operative Bank
- Coventry Building Society
- First Direct
- Leeds Building Society
- Metro Bank
- Nationwide Building Society
- Nottingham Building Society
- Post Office Mortgages
- Principality Building Society
- Royal Bank of Scotland
- Tesco Bank
- The Woolwich
- Virgin Money
- West Bromwich Building Society
- Yorkshire Bank
- Yorkshire Building Society
For more information about this report visit https://www.researchandmarkets.com/r/sg2c91