There’s a lot of noise surrounding mortgage comparison tools on the market, but what exactly does this mean?
More tools = more choice = more confusion?
The paradox of choice
Robo-advice, going direct or even switching to a new broker – with such a variety of different options to choose, customers can now shop around.
Comparison tools are growing more popular cross-sector. They do more than help consumers choose between a summer holiday in Benidorm vs Barbados (choose wisely).
Even big lenders are jumping onboard the comparison tool wagon in a bid to keep up with the digitisation of the mortgage market.
These online tools source mortgage deals using a mix of property data and disposable income details to calculate offers relevant to your situation.
If borrowers qualify for deals, they see the lender’s product transfer rates compared to other products. So, they can see if the grass is greener should they opt to switch.
New tool features can even allow borrowers to see savings on remortgaging with a new deal vs product transfer with their current lender.
Jeremy Duncombe, director of intermediary distribution at Accord Mortgages, cited customer choice as the greatest threat to brokers.
He was quoted in the Mortgage Introducer stating:
The biggest risk is what they (the customer) feel is the right thing to do. If they feel it’s better to go direct or execution- only, they’ll do thatJeremy Duncombe, director of intermediary distribution at Accord Mortgages
What does this mean for my clients and me?
Borrowers could be missing out on cheaper deals from rival lenders. And, similar digital tools are now offering timely options to your clients.
Is this kind of digital disruption good for brokers?
Every disruptor uses technology and companies have been digitising processes for a while now. However, when it comes to your mortgage, it’s a very emotionally driven decision. It’s your home, its where you live- there’s something very human about it.
And, as human beings, we’re wired to talk to people about such sentimental buying decisions. We develop feelings and need advice and support throughout the process- just like a human relationship.
If they (the customer) feel that they have a good broker experience of someone looking over them continually over the fixed period, it does not matter what options they get, they will go back to the broker.Jeremy Duncombe, director of intermediary distribution at Accord Mortgages
By looking after the customer all the way through, that risk (losing customers) is mitigated almost entirely.Jeremy Duncombe, director of intermediary distribution at Accord Mortgages
Remember our blog on how much time brokers spend on new customers vs retention? Might be a good time to refresh your memory on that one while you’re here.
Borrowers still have needs for real-life brokers. But, this doesn’t mean that technology shouldn’t be used at all- it’s about balance.
Technology should be on your side, its a supportive solution. Something that’s freshening up a process, not entirely replacing it. Especially when you’re dealing with emotionally driven product purchases.