Almost two-fifths – 38% – of people regret buying a home and wish they would have rented for longer because of the stress associated with the mortgage application process, a survey found.
A poll of 2,002 people carried out by Censuswide on behalf of banking software provider Ohpen revealed this was the case for homeowners aged between 24 and 35.
Mortgage-related stress was felt mostly by younger respondents. Even though all age groups reported feeling some level of stress while applying for a mortgage, this was the case for a higher share of Gen Zs (28%) than baby boomers (11%).
The most common feeling respondents associated with the application process was anxiety, as cited by 46% of people.
Some 22% of respondents aged between 18 and 24 called in sick at work because of stress relating to the mortgage process, while 12% said they wished they knew how much it would distract them while at work.
A further 26% of respondents aged between 25 and 34 said the stress triggered by applying for a mortgage caused them to forget important things, while a quarter said it led them to comfort eat.
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People who applied for a mortgage with a partner or spouse were more likely to say the process was stressful, accounting for 51% of those in this cohort compared to 45% who applied alone or 44% who applied with friends.
The process was so challenging for some respondents that 13% said they would rather be stuck in a lift for 12 hours than go through it again and 14% said they would prefer to listen to roadworks continuously for four hours.
The impact of fluctuating rates
Some 32% of respondents said rising interest rates was the most challenging part about applying for a mortgage, rising to 41% of Gen Y.
A third said stable interest rates would have made the process less stressful, with this increasing to 43% among Gen Y and 31% of Gen X.
A third of those aged between 25 and 34 said they wish they knew what interest rates would be available to them before applying for their first mortgage.
A need for greater understanding of mortgages
Respondents called on schools to educate students on mortgages and finances, with 81% saying this should be on the secondary school curriculum.
People admitted to not understanding basic mortgage terms before applying and 30% said their anxieties would have been relieved if they were better informed about the process.
Respondents also suggested that the process needed to change, with 37% saying fewer delays would reduce stress and 36% citing less paperwork. Some 15% said there should be better online tools.
Jerry Mulle, UK managing director at Ohpen, said: “These findings are a damning indictment of the inefficient mortgage application processes delivered by banks’ archaic legacy systems. Hundreds of thousands of Brits apply for a mortgage every year, and so the total impact on mental health and wellbeing, consumer spending and productivity is significant. The generational gap in the impact of mortgage applications on wellbeing and consumer spending makes it clear that banks’ processes have not modernised – what was cutting-edge 40 years ago is no longer fit for purpose.
“We need to see a coordinated effort to make the process more transparent and inclusive from the outset, and speed up the application process by taking complex legacy technology out of the equation and enabling better real-time data sharing between all the stakeholders involved in the home buying journey.”
This article was first published on YourMoney.com‘s sister site, Mortgage Solutions. Read: Nearly two-fifths regret buying because of ‘stressful’ mortgage process – Ohpen
