Two in five Britons think mortgage applications are unfair
YouGov data also shows that, if they were applying for a mortgage, most would prefer to have a higher deposit with lower interest rates than a smaller deposit with higher interest rates
In April 2021, the Chancellor of the Exchequer announced that the government would be backing 95% loan-to-value mortgages for properties valued up to £600,000. The move is part of the Conservatives’ broader plan to turn “Generation rent into Generation Buy”.
But is there any appetite for it?
Data from YouGov Direct shows that, when asked about the tradeoff between taking a mortgage with a higher deposit requirement – but a lower overall interest rate – or a mortgage with a smaller deposit and a higher interest rate, two-thirds would go for the former (65%). Just one in five would opt for a lower-deposit, higher-interest plan (20%): with the proportion remaining the same for Britons aged 18-34. The 5% deposit plan may not move the needle for would-be homeowners.
But if lower-deposit mortgages aren’t necessarily the answer to their woes, there may well be appetite for reforming the process of getting a mortgage. Two in five Brits (38%) think the criteria used to approve or deny mortgages are unfair, with less than a quarter (22%) saying the application process is fair.
Banks could also benefit from providing current customers with more incentives to stick with the devil they know. While 18% of the public say that, if they were in the market for a new mortgage product, they would stay with their current provider, three-quarters (73%) say they would shop around for the best deal. There’s clearly at least some stickiness when it comes to finding a mortgage; if banks can find ways to reward the loyalty of long-time, householding customers, they may be rewarded in turn.
Methodology
YouGov polled 1,500 British adults online on 21 June 2021 between 14:57 and 18:14 BST. The survey was carried out through YouGov Direct. Data is weighted by age, gender, education level, region, and social grade. Results are nationally representative of adults in Great Britain. The margin of error is 4.0% for the overall sample. Learn more about YouGov Direct.
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