UK homeowners spend more time searching for a holiday than a mortgage, which could prove costly for some, according to recent research.
A report from credit report provider Noddle released on 12 July showed customers spent an average of five days searching for a holiday, six days for a car and a mere 3.6 days choosing a mortgage.
The firm found 26 per cent of mortgage customers bought the first available product with 36 per cent admitting they had little knowledge of how mortgages work, leading to 17 per cent of borrowers feeling unsatisfied and trapped in their financial contract.
When comparing two-year fixed rate deals offered by high street banks, varying from 1.84 per cent to 4.22 per cent, the report found the difference equated to an additional £3,000 a year on a typical £200,000 mortgage and warned choosing the first mortgage offer available could be a costly chance.
Noddle attributed the high percentage of borrowers accepting the first offered mortgage to concerns surrounding their credit scores, with 23 per cent worried that applying for more than one could damage their score or prevent a purchase altogether.
Noddle commissioned Opinium Research to interview 2,008 UK adults online from 4-8 May 2018 and the results were weighted to represent the whole population.
Jacqueline Dewey, managing director at Noddle, said the excitement of finding a house, combined with worries about being accepted for a mortgage, meant it can be easy to rush a decision about a mortgage.
Ms Dewey said: "When we are talking about thousands of pounds on the line it really does pay to do your research- rates vary across the market so don’t take the first deal available and try to speak to more than one lender.
"Understanding your credit score and getting it in good shape beforehand will also help you get the best rates."
Kevin Roberts, director at Legal & General Mortgage Club, suggested it could be the tedious nature of the mortgage process that deters consumers from spending time on the search.
He said: “Our value of a broker research found that a third of those who used a broker said it removed the hassle of filling out forms and applications – so it is no wonder that savvy borrowers are taking advantage of their services and focusing their efforts on finding their dream home, holiday or car instead.”
He added: “As well as providing invaluable advice on the thousands of products available in the market, brokers also help to make the process as smooth and as efficient as possible for consumers.”
rachel.addison@ft.com
