Software-as-a-Service provider Ohpen conducted research into the mortgage process with UK respondents revealing more should be done to update and educate on the process.
UK mortgages for the longest time have been primarily run on bank legacy systems. However, with the emergence of cloud banking and other digital bank infrastructure, Ohpen has found that there are new calls for updated tools to be added to the process.
According to the survey, 15% called for better online tools to the mortgage buying and managing process. But where most of UK residents’ concerns regarding mortgages lies is with understanding the whole process, which has led to a rise in stress and anxiety.
Three in ten people (30%) said a better understanding of the process beforehand would have relieved stress during the mortgage application process, as well as fewer delays in the process (37%) and less paperwork (36%).
Half of people that have applied for a mortgage revealed the feeling they most associate with the mortgage application process is anxiety (46%). Although all age groups had some level of stress regarding the application process, there is a stark generational divide, with 38% of homeowning 24 to 35-year-olds wishing they had chosen to rent for longer instead of going through the mortgage application process.
Financial education has a role to play in reducing stress, with Ohpen calling for better transparency of the process, especially for younger and first-time buyers.
Four in five people that have applied for a mortgage (81%) believe mortgages and financial education should be on the secondary school curriculum, with many admitting they didn’t understand basic mortgage terms before the application process.
Jerry Mulle, UK Managing Director at Ohpen, commented on the research: “These findings are a damning indictment of the inefficient mortgage application processes delivered by banks’ archaic legacy systems. Hundreds of thousands of Brits apply for a mortgage every year, and so the total impact on mental health and wellbeing, consumer spending and productivity is significant.
“The generational gap in the impact of mortgage applications on wellbeing and consumer spending makes it clear that banks’ processes have not modernised – what was cutting edge 40 years ago is no longer fit for purpose.
“We need to see a coordinated effort to make the process more transparent and inclusive from the outset, and speed up the application process by taking complex legacy technology out of the equation and enabling better real-time data sharing between all the stakeholders involved in the home-buying journey.”
The stress of mortgage application processes is also having an impact on workplace productivity – the falling rate of which Prime Minister Keir Starmer has called out as a priority for the new government.
