Six in 10 borrowers (59%) said that they worried about finding an affordable rate when their current deal comes to an end, new research from Lenvi has revealed.
According to Lenvi’s market trend report, people are much more likely to switch deals in 2024 compared to 2022, with this figure rising from 60% to 80%.
Furthermore, certain groups are more likely to find it difficult to find a financial product that matches their financial situation.
25% of 25 to 34-year-olds reported feeling excluded from the mortgage market, with this figure jumping to 43% among 18 to 24-year-olds.
What’s more, 33% of those with physical impairments and cognitive disabilities said they found navigating the market difficult, with those with mental health and other long-standing health conditions also affected.
Richard Carter, CEO, Lenvi said: “The role that artificial intelligence (AI) could have in opening up the mortgage market to those who are worried about their rates or individuals who are typically excluded from the market is clear.
“For example, research shows that half (49%) of consumers would be pleased to see green lending innovations, such as lower mortgage rates tied to household energy efficiency.
“Lenders need to use technology to rapidly innovate and launch much-needed products that will support people from a range of backgrounds and with vulnerabilities.”
Indeed, the adoption of Open Banking certainly seems to be growing, with 65% of people reporting that they would consider giving a lender temporary access to their transaction history if it could lead to a more personalised rate.
Carter continued: “Open banking has been the flavour of the decade in financial services. Now that the advent of AI is well and truly upon us, it’s understandable that some consumers are nervous.
“However, Millennials and Gen Z are more than ready to take advantage of the benefits AI can afford.
“With a balanced grounding in regulation and if lenders can demonstrate that consumers can genuinely prosper, 2024 will be an exciting time for mortgage and lending innovation.”
Lea Karasavvas, member of the Society of Mortgage Professionals board, added: “The cost-of-living crisis we currently find ourselves in, has led to a lot of innovation from lenders to navigate the payment shock that will have been felt by many.
“This innovation has seen lenders go longer on mortgage terms to 40 years, some lenders increasing their interest only proposition, other lenders entering the joint borrower sole proprietor space, to name but a few.
“Lenders such as Virgin, have launched 5-year fixed rates with a 2-year tie. Halifax and Virgin have also proposed new products called Own New Rate Reducer significantly reducing the rate paid by borrowers on new builds by utilising the developers incentive budgets on mortgage rate reductions. Skipton also launched a 100% mortgage with certain caveats last year, also.
“With an ever evolving market it is no wonder 15% plan to look online, and 83% will go to a broker. It is also understandable that only 15% of Gen Z understand their mortgage as so much has changed and evolved of late it will have generated confusion.
“The role of a broker has never been more pivotal and crucial, and the cost of living crisis has enhanced the broker/borrower relationship hugely as brokers try to navigate their clients through a payment shock that many would never have witnessed before.”
