It’s not often that research, particularly a media headline, will make me shake my head with utter bewilderment – especially as I tend to think we’ve seen them all by now – but some recent research regarding borrowers’ own knowledge about their mortgage did just that.
The research came from a communications business called, Keep Me Posted, and while it did only have a sample size of 1,000 mortgage borrowers it still seems relevant and unfortunately may well be representative of the general mortgage-holding public. Essentially, it found that almost half of all those with a mortgage (42%) are completely unaware of what their mortgage rate is.
Now, perhaps for us working in the market this might seem somewhat odd. I’m not sure about you but I tend to be rather obsessive about such things especially when I know my special rate is coming to an end. However, having asked the same question of friends and acquaintances, this appears to be quite common. I’ve lost count of the number of times someone has answered, “Er...four point something...” or, “Not sure...three-ish...I think.” Let’s not even get into the issue of asking them when their term might end or when they might be able to remortgage without any charges
The point is that large numbers of mortgage borrowers – yes, even your clients – are completely clueless when it comes to even the headline details of their current mortgage. Ask them how they might be impacted were Bank Base Rate to go up, or their lenders’ SVR, and again you are likely to be met with confusion. In the very same research 38% were surprised to learn that a 1% rise could mean a significant increase in their monthly payment on a variable rate mortgage.
Add in to this, the vast amount of research that shows large numbers of borrowers believe they would struggle to pay their mortgage when rates do rise and you can see there is a great need for borrowers to be communicated with and informed about these potential issues. Here lies a considerable opportunity for brokers, not just with their existing clients but those potential new ones who are not receiving anything remotely like an ongoing service from either the broker who sold them their last mortgage or their current lender.
This type of new and existing client communication is often seen as particularly labour-intensive work for advisers but with the use of technology it doesn’t have to be this way. Indeed, with systems like our own Revolution and its customer relationship management (CRM) functionality, not only is it possible to have a regular appraisal of those existing clients who may, for example, be coming to the end of their special deal or may recently have moved on to an SVR, etc, but there is also the opportunity to create tailored communication messages specifically for them at the touch of a button. These can detail everything about their existing mortgage and the specific deals that are currently available and which might be suitable for them.
To have this type of detailed information about their existing circumstances and options, is perfect for the type of customer that is not as clued up about their mortgage as they perhaps should be. Particularly when they might be seeing all manner of messaging about mortgages reflected in the wider media. With much talk about ‘price wars’, ‘record low two/three/five-year fixes’ and the like they might have a completely false view of what they can secure in the current climate. They may not be aware of the MMR, or the stricter affordability measures lenders now have in place, and therefore this type of communication from a broker can help start them on the right road, rather than one that is completely unachievable.
The point is to utilise this type of technology in such a way that it becomes a natural part of the day job. This is about supporting how brokers retain their existing client bank and helping them deliver their overall market message to potential new clients. Technology, like our system, is a business enabler and the more you are able to educate, inform and disavow those clients who might have picked up the wrong information, the more likely they will become long-term clients who keep coming back to you year after year.
