Majority of homeowners would use unknown specialist lender

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54% of UK homeowners would consider opting for a specialist lender in their mortgage search, even if they had not come across the provider before, according to new research by Butterfield Mortgages.

The independent survey among 690 UK mortgage customers showed 32% used a broker to find their current mortgage, making it the most common method of sourcing a loan. This was followed by respondents relying on their existing bank (24%) or getting a new product from a previous mortgage provider (21%).

Search engines were used by 19% of people when looking for a mortgage, 14% relied on word of mouth, while 8% used comparison websites.

Meanwhile, 62% of mortgage customers in the UK feel brokers can find products that would not otherwise be available to them. A further 60% believe working with intermediaries makes the application process easier.

When it comes to the key factors influencing borrowers’ choice of product, ‘the terms of the loan’ and ‘any additional fees to be paid’ emerged as the most prominent – both were cited by 85% of customers as being important considerations. This was closely followed by the interest rates (84%), while the length of the fixed term and the ease of application were both selected as important by 80% of customers.

The research also showed a growing appreciation for mortgage providers’ green credentials, with over half of respondents (58%) considering the lender’s environmental and social policies to be important – this rises to 65% among 18-34-year-olds.

Butterfield’s study also uncovered a lack of satisfaction among homebuyers with the customer care they receive from current providers. The majority (69%) believe lenders should offer more support about the mortgage or finance options available to borrowers, while 45% think their mortgage provider has poor communication.

Alpa Bhakta, CEO of Butterfield Mortgages, said: “As the mortgage market continues to evolve, borrowers are increasingly looking beyond the regimented ‘tick-box’ centric methodology of many mainstream lenders. The research shows that most homebuyers would now consider specialist lenders, which might be able to deliver greater flexibility or products better suited to their needs.

“The research has also unveiled clear concerns among mortgage customers surrounding the levels of care they are receiving from their mortgage provider. With interest rates and inflation rising, lenders must take note – more support is needed to help customers navigate this testing economic climate.”

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