Most borrowers fail to qualify for comparison site mortgage deals

Most borrowers fail to qualify for comparison site mortgage deals

Kate Palmer

August 18 2019, 12:01am

The Sunday Times

Fewer than four in 100 people looking for a mortgage are actually eligible for the deals found by comparison websites, research for The Sunday Times shows.

Analysis of searches made by 11,000 borrowers shows that just 385 — or 3.5% — would qualify for the mortgages they are shown.

Many comparison websites have a simple calculator for borrowers that asks for the property value, size of deposit and loan length. They then see a list of available deals that fit these criteria — but the loans will depend on lenders’ affordability tests, which scrutinise expenses such as gym memberships, private school fees and spending on credit cards.

The credit reference giant Experian found that only a tiny number of people will actually be eligible for these deals, which represent about 73% of available mortgages. They exclude niche products, such as home loans only available through brokers or offered by private banks.

Homebuyers who fail to pass the tests are either declined outright or offered less money than hoped for.

Borrowers have more luck if they use an eligibility tool, where they input salaries, spending commitments and debts. Experian said 22% of borrowers would qualify for the deals found this way.

Some websites, such as Compare the Market, offer even more detailed eligibility checks, which include a search of the borrower’s credit profile. These are time-consuming to complete, but mean that borrowers are more likely to be accepted for any of the deals they see.

Lisa Fretwell, from Experian, said: “People don’t want to leave anything to chance when buying their dream home — they want to find affordable mortgages they will be accepted for.”