New research from core banking SaaS provider, Ohpen, reveals the impact of UK banks’ legacy mortgage systems and processes.
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%). 15% also called for better online tools.
Half the people that have applied for a mortgage reveal 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 24–35-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, says: “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 lengthy and inefficient mortgage application processes is impacting working habits, lifestyles and relationships. A quarter of 25–34-year-olds surveyed admit to comfort eating due to stress triggered by their mortgage applications. People also confess to crying more, including at work, and drinking more alcohol due to stress triggered by the application process.
The stress of mortgage application processes is also having an impact on workplace productivity – the falling rate of which Kier Starmer has called out as a priority for the new government. Nearly a quarter (22%) of younger adults surveyed (18–24-year-olds) admit to calling in sick to work due to stress triggered by their mortgage applications, and more than one in ten respondents (12%) wished they knew how much time at work they would have been distracted by doing mortgage admin before applying.