2018年-FCA英国金融行为监管局_ms16_2_2_annex_3_12页_417kb

Mortgage Market Study - Annex 3 Summary

Core Content

This document provides a supplementary analysis to Chapter 4 of the Market Study, focusing on how consumers find, compare, and access mortgages, including the use of tools and intermediaries. It highlights the challenges consumers face in understanding mortgage products and the role of intermediaries in the process.

Main Findings

How Consumers Find a Mortgage

• Many consumers, including first-time buyers, home movers, and switchers, conduct pre-application research.
• The internet is a common starting point for mortgage research, with consumers using lender websites, comparison sites, and advice forums.
• Around 83% of residential mortgage holders used at least one key information source in the last three years.
• Only 37% used more than one source, with lenders' websites being the most popular (63% usage) and considered most useful by 48% of consumers.
• Non-lender websites (e.g., MoneySavingExpert) and price comparison sites were also used, but less frequently.

Understanding Mortgage Eligibility

• Two-thirds (66%) of mortgage holders feel confident in finding out who will lend to them.
• However, this confidence is lower among certain groups, such as older individuals, the self-employed, and those with financial difficulties.
• Lenders' tools provide more detailed information on borrowing capacity and eligibility than PCWs or intermediaries.

Using an Intermediary

• Intermediaries help consumers by gathering personal and financial information and using mortgage sourcing systems (MSS) to filter suitable products.
• MSSs are useful for comparing quantitative factors like initial rates, fees, and LTV but are limited in assessing qualitative criteria.
• Intermediaries are often seen as better suited for complex situations, and their role is valued by consumers.

Cost and Value Considerations

• Many consumers find it difficult to calculate and compare mortgage costs.
• Headline rates are a primary focus, but the total cost of credit is less understood.
• Only 54% of consumers find it easy to understand total mortgage cost, and 56% find it easy to compare products from different lenders.
• Consumers often have a target monthly repayment amount in mind during their research.

Comparing Mortgages

• There is a wide range of product features and pricing, making comparison difficult.
• Some consumers do not compare multiple lenders due to reasons such as satisfaction with the chosen lender, recommendations, or perceived complexity.
• A scatter plot (Figure 3.3) illustrates how similar mortgages can have different headline rates and fees despite equivalent overall costs.

Product Features Importance

• Monthly cost is the most important feature for consumers.
• Other features like overpayment flexibility, upfront fees, and deal type (fixed or variable) are moderately important.
• Features like portability are less significant in initial borrowing decisions.

Consumer Perceptions of Advice

• Consumers often misunderstand the role of mortgage advice, confusing it with the lending decision itself.
• Some believe that advice is mandatory or that advisers only provide support, not actual advice.
• There is limited awareness of the execution-only route, which lenders are not allowed to discourage.

Innovation in Advice and Distribution

• There is little interest among established intermediaries and lenders in developing online advice services due to limited commercial incentives and regulatory concerns.
• Concerns include the inability of algorithms to handle complex circumstances, potential misrepresentation of financial information, and the risk of recommending inappropriate products.
• Online advice could offer benefits like consistency, lower costs, and reduced human error, but requires further testing and refinement.

Reasons for Choosing a Lender or Intermediary

• Choosing a Lender Directly:
  • Attractive rates (30%)
  • Existing relationship (35%)
  • Previous experience with the lender (37%)
  • Ease of accessing a branch (53%)
• Choosing an Intermediary:
  • Higher satisfaction with intermediated mortgages (68% would use the same intermediary again)
  • Perceived complexity and emotional needs (especially for first-time buyers and retirees)
  • Better understanding of eligibility and product suitability (due to intermediaries' ability to interpret lender criteria)

Key Information

• The Financial Lives Survey 2017 is a key source of data, highlighting consumer behavior and perceptions.
• MSSs (Mortgage Sourcing Systems) are important for intermediaries but have limitations in assessing complex cases.
• PSD2 and open banking initiatives may enhance the availability of financial data for mortgage tools, but their impact depends on lender cooperation.
• Consumer satisfaction is higher with intermediaries, especially in complex situations.
• Price focus is strong among consumers, with 2-year fixed-rate mortgages being popular due to lower headline rates.

Conclusion

The document underscores the need for better, more user-friendly tools to help consumers understand mortgage products and their eligibility. It also highlights the value of intermediaries in navigating complex financial decisions and the potential for innovation in online advice, provided regulatory and practical challenges are addressed.