Nearly three-quarters of the 1,523 recent borrowers interviewed by BMRB (73%) said they thought it was important to shop around for mortgages (although mortgages were pipped to the post by car insurance, at 75%). And most borrowers did in practice shop around for their own mortgage. 23% - nearly one in seven - said they sought product information from four or more lenders, with 19% getting information from three lenders and 10% from two. However, 23% sought product information from only one, while 22% relied on their adviser to get all the information they needed.
33% of recent borrowers said that comparing different mortgage deals was straightforward, while 27% relied on an adviser to compare deals for them. 20% said comparing deals was difficult because the information varied, 4% said it was difficult because the information was not presented well, and 5% said it was difficult because the information was too long. The research was undertaken before the introduction of the "key facts" illustration under the new FSA mortgage regime, and the CML plans to repeat the research next year to track whether any changes in sentiment become apparent.
In terms of confidence, 29% of recent borrowers were very confident that they managed their financial affairs well, while 52% were fairly confident. 11% said they were not very confident, and that they might be better off if they managed their financial affairs better, while 2% said they were not at all confident. Only 2% said they were not interested in financial affairs, and 4% said they relied on someone else to do this.
The research also asked recent borrowers whether they thought the mortgage industry lends responsibly. 17% said the industry was responsible, 62% said it was mostly responsible but there was some irresponsible lending, and 18% said they thought there was a lot of irresponsible lending.
Commenting on the research, CML Head of External Affairs Sue Anderson said:
"Consumers who don't feel confident about their financial affairs showed up as just as likely to shop around for mortgages as their more confident counterparts. It looks as if the main difference is in how they feel rather than in how they act.
"A huge majority of recent borrowers believe their lender treats them openly, honestly and fairly. And only a small minority say they are not confident in dealing with their finances. But we cannot be complacent about the findings - while the industry is broadly seen as responsible, there is a rump of consumers who perceive at least some lending as irresponsible. We will repeat the research next year to see whether the advent of mortgage regulation makes a difference to people's perceptions of the lending industry and to their confidence in their own financial capability."
