Are you a mortgage prisoner?

5 minutes to gain a different perspective.

Are you happy with your mortgage deal? Probably not. I wasn’t either — until the other day.

Imagine the scene…             

It went like this. I was sitting on a train with my tablet, musing on the injustices of life, and I decided to finally take action. So I logged on to a comparison site and had a look at what was on offer.  I was mid-way through my mortgage agreement - with no surrender penalties I was able to secure a brilliant deal: five-year variable (including a fixed interest rate option) with an offset facility capped at 1.5%. I switched here and then, and arrived at my destination a much happier and slightly richer man.  All it took was five minutes and a few clicks. I flew into the office like an over enthusiastic school boy impatience to wax lyrical about my experiences and the amazing product features.

Sat at my desk, Cheshire Cat smile in full force – “James…I just saved £300 a month on a re-mortgage deal”. Before James could respond, I let loose whilst pointing to my mortgage decision in principal document on my tablet.

… the mortgage product features

•  Great variable rate, capped at 1.5% with an option to fix the rate twice over the life of the product – in this case it was five years
• There is no early repayment charge or lock-in, I can leave when I want (just like my mobile contract)
• My mortgage is linked to a limitless set of offset accounts, and across a range of providers
•  I can also use other assets as leverage – so I have offset the mortgage against my vintage comic collection that is worth £7000

 it went on …

• I have access to an abundance of tools and complementary financial and lifestyle applications
• I can interact with my provider and product through any channel
• I also have an option to sell my data and dependent upon its impact value…get cash back.

Now that the scope of Open Banking has disrupted the mortgage market (long over-due)  – the options available have really empowered me, I finally have financial mobility.

Mortgage Open Banking, not quite yet…, and back to reality.

• Wouldn’t it be amazing if the above was a reality? – real choice and product flexibility.

 At present, we are choice restricted - internally with my current provider or externally.

Too many intermediaries provide a poor service at a high cost. My channel choices are sub-optimal and the current selection of providers – just do not understand me…or want to understand me.

I am a ‘mortgage prisoner’ with only a small window to switch. I appreciate that the Regulator (UK focus) is seeking to increase competition, choice, reduce risk and improve transparency within the mortgage market – from a customer experience (‘CX’) perspective.

However, we appear to be light-years away from having a mortgage market that speaks to the customer and its needs.

I would be interested in understanding your view of the mortgage market; and how it works or does not work for you?

The onset of the data driven digital economy where financial mobility and channel choice will increase in prominence will have its casualties. The casualties will be those providers that are unable to pivot at pace with the right offering and those that do not pivot at all.

•  Are you currently banked with a casualty, in waiting?

About Ambrish: Ambrish is an accomplished, well-rounded financial services director with a 20-year career spent shaping and delivering business outcomes. He is an executive-board-level advisor at the intersection of business, technology, digital transformation and FinTech (https://www.linkedin.com/in/fsdirector/).

• Banking strategy and fintech
• Machine learning—Ethics, rights and conduct
• Keeping Up vs. Keeping Ahead: Banking Strategy
• How prepared are you for the 4th Industrial Revolution?—Banking
• Banking 2025—Digital or Red Telephone Box

All views expressed are my own.

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