What you don’t know can definitely hurt you.

1 in 3 homeowners in the UK do not know how much their mortgage is costing them, according to a recent habito and YouGov survey.

Just dwell on the madness of that for a moment….

At habito we spend an awful lot of time thinking about mortgages. We’re, of course, interested in the nuts and bolts, the rates and the terms, the eligibility and accessibility etc. But even more than that, we are interested in how people interact cognitively and emotionally with their mortgage.

One of our deeply held suspicions is that the majority of people are in the dark about their mortgages. Not because they’re lazy, not because they’re stupid, but because the process of getting a mortgage is so traumatic that as soon as it’s over, no-one wants to think about it again.

We get that, but this is a terrible outcome for the consumer. We’re all effectively rewarding brokers and lenders for having a terrible process by staying on bad deals and keeping our heads in the sand… In many cases (1 in 4) paying thousands of pounds in unnecessary interest per year. It’s no wonder the mortgage industry hasn’t evolved much in the last 30 years!

Habito and YouGov commissioned some research over the last few weeks to try and get to the bottom of some of these thoughts. Here’s some of the headlines:

  • One in eight (over 900k mortgage holders) don’t know if they have an interest only mortgage or not
  • Nearly one in ten (nearly 700k mortgage holders) don’t know if their mortgage is fixed or variable rate
  • Nearly one in ten (nearly 700k mortgage holders) don’t know how long their mortgage term is
  • One in every 20 mortgage holders (380k people) cannot even name their lender

That is a lot of people for whom the trauma of getting a mortgage has been enough that they can’t recall even the most basic details of the biggest financial commitment they’ve ever made.

At habito we’re trying to build a different future for mortgages, where the toil and the horror is removed from the process along with all the jargon and misinformation. Consumers deserve a simple, quick and transparent process and they certainly don’t deserve to be penalised for the failings of lenders and brokers.

We’d love to hear from anyone for whom this resonates, or who thinks we’ve got the wrong end of the stick.

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