Mortgage lenders make almost no attempt to stop existing borrowers from remortgaging, according to a survey from financial research group PR3 MAPA.
The survey of over 300 borrowers was designed to help lenders improve their customer fidelity by finding out which mortgage services borrowers appreciate. However, the research discovered that over 80% of borrowers who have switched mortgage lenders did not receive any contact from their lender to persuade them to stay.
The results also found that lenders are not doing enough to keep their borrowers happy before they try to remortgage, with 33% claiming to be dissatisfied with the interest rate being levied upon them and 73% reporting they were unhappy with the way problems were handled.
Mark Pavan, managing principal at PR3 MAPA, said: ‘The market research clearly shows some dissatisfaction with consumers’ treatment from their mortgage lenders, and once people have remortgaged and find that it is not as hard as they thought it would be, they are much more likely to do it again.
‘Remortgaging will continue apace if the large lenders persist in what they are doing with unsustainably low mortgage rates to attract new customers. These low rates lead to a decline in margins and all they are doing is accelerating this. It may be in the consumers interest but all they are doing is rewarding those customers who are disloyal.’
Nevertheless, the survey did find that greater communication from lenders could promote greater customer loyalty. A total of 90% of borrowers surveyed said they would ask their lender for a new quote before remortgaging away if they felt their lender had had the ‘right amount’ of contact with them over the initial term, and surprisingly 100% would ask for a quote if they felt they had been ‘contacted too often’.73% of borrowers said they were unhappy with the way problems were handled