Brokers discuss whether the market and its processes need to be simplified
When broker Bob Singh (pictured left) recently came across a mortgage document in his father’s name, from 1977, he was struck by several things. The variable mortgage rate was 12.50%, and the mortgage offer was set out on just one double-sided piece of paper. “No 100-page booklet that clients never read,” Singh commented, reflecting on how different it was compared to extensive mortgage paperwork today. “With regulation, things have been made more complex than they need to have been.
“Mortgages have evolved over the ages from simplistic home loans to extravagantly funded vehicles with warning signs all over the place requiring degrees in English to read the T&Cs, maths to understand the KFI/ESIS numbers and economics to forecast rates. You'd be forgiven for thinking that clients these days have to be as clued up as the advisers to understand mortgages.”
The mortgage offer to Singh’s father had an assigned life policy – the broker suggests that a better industry focus currently might be on properly protecting clients, rather than producing reams of small print. “Nowadays, life cover isn’t mandatory, and when an uninsured breadwinner passes, the house has to be sold,” he said. “Just think if life cover and income and redundancy protection were compulsory. How many families would have no mortgage left, and have a lump sum, if one parent passes? Banks, solicitors and brokers should get disclaimers signed and clearly show that life cover was discussed but was rejected. Sadly, as an industry we have lost focus.”
Singh, who is director of Chess Mortgages, believes loans have become increasingly complex over the decades as lender and product choice have expanded. “Just as the universe isn't going to shrink any time soon, this I believe to be the case with mortgages,” he said. “The choice is only set to become wider. The UK will continue to attract new entrants due to our stable property market conditions. There is scope to make mortgages simpler and easier. By this I don't mean just the products, I mean the process too. It has to be an industry-wide effort.”
Application forms should be standardised, in Singh’s view. “Each lender has their own form asking the same questions in a different order and way,” he commented. “It can be standardised, but lenders fear the cost of changing their legacy systems.” He also believes that fact finds should be standardised too. “Every firm has a different version - let the sourcing systems lead the way as they can submit applications on the broker’s behalf, saving time and avoiding errors,” he said. “A universal template will do the trick.”
Singh would go further too, with approvals in principle. “AIPs should be more than a calculation to see if the case fits,” he suggested. “As most advisers collect all documents up front, why not get a firm decision at the early stages? Someone should be able to give a binding decision, subject only to valuation. This would also speed up the buying process. AIP does not mean the loan will be granted but is viewed by many as a guarantee.”
Read more: How knowledgeable are mortgage lenders' underwriters?
What benefits has mortgage complexity brought?
So is Singh right? Have mortgages today become too complicated? While agreeing that in some respects this is true, adviser Joela Jenvey (pictured second from left), at Nurture FS, considers that this complexity has also brought greater protection, choice, and responsibility. “There was a time when getting a mortgage was a relatively simple, personal process,” Jenvey observed. “A local bank manager might know your family and approve your loan based on a handshake and some paperwork. The products and risks were more straightforward. Today’s mortgage landscape is far more intricate.”
She continued: “We now operate in a heavily regulated environment with diverse funding sources, detailed affordability assessments, and advanced digital systems. While it can feel overwhelming, especially with lengthy documentation that many clients struggle to fully digest, much of this complexity exists to ensure better outcomes and protect borrowers. This is where the role of the independent broker is more valuable than ever. We sit on the client’s side of the table, navigating the complexities on their behalf, cutting through jargon, and tailoring solutions that genuinely suit their needs. We ensure recommendations are well-documented, transparent, and in line with regulatory expectations, but more importantly, we provide clarity and reassurance in what can be a stressful process.”
Jenvey believes simplification potentially lies in how information is delivered to the client. “We need clearer, more concise documentation and more joined-up systems between lenders, conveyancers, and the Land Registry,” she said. “We also need to maintain a human touch, combining technology with empathy and experience. Ultimately, while the mortgage process may never return to its simpler past, we can absolutely make it feel more accessible, more personalised, and more aligned with each client’s goals.”
Broker Richard Campo (pictured second from right), head of growth at Heron Financial, believes that mortgages have become more complex, in line with everything else today. “The added complexity with mortgages is actually a good thing because as a general rule, it means you could help more clients than the more one-size-fits-all approach of the big lenders,” Campo said. “The introduction of near prime, complex prime, JBSP, portfolio or non-portfolio landlords, limited company, income boost, own new, green mortgages, and on and on, is a good thing but it can make it very hard for less experienced advisers and certainly clients to navigate.”
He continued: “Once you get past all of that, you then have a record number of mortgage products to choose from. However, that is a double-edged sword as clients, therefore, have never needed advice so much. I’m not advocating for more simplicity, as that would inevitably lead to less choice and less clients to help, but what I would advocate is for better research tools, use of AI etc, to assist brokers so they can focus on what is most important – their clients and their needs. I certainly do agree that mortgage offer documents are too complicated and need simplifying, but that is only a representation of the complexities of the mortgages on offer.”
In Campo’s view, one of the main issues regarding industry complexity is the European Standardised Information Sheet, designed to help consumers compare different mortgage products and make an informed decision about which mortgage is right for them. “It is a particularly ugly and cumbersome document,” he said. “I’m certainly not a fan of Brexit, but it’s stuff like this that we need to tackle if we are to make Brexit work. I personally would start again with a blank sheet of paper and see how much you can condense down the key information, which I would be staggered if that would be more than three to four pages. Better still, provide a link via email for the real in-depth T&Cs. The truth is that clients rarely ever read or refer back to the mortgage offer ever again, other than to check when their deal ends.”
Adviser Michelle Lawson (pictured right), from Lawson Financial, believes industry regulation has made things clearer, and made it easier to advise borrowers, but it has also created its own issues. “There is a lot of documentation involved in this now, as a result, which the majority of people don’t fully read,” Lawson said. “There is little responsibility on the consumer, so there is also a lot of detail and caveats now that have to be included in paperwork. Simplification is needed but in the right, structured way. There needs to be more common sense, more reasoning, more autonomy and a return to old school underwriting.” She added: “The broker community don’t want things to simplify or automate too much otherwise there would be little reason for consumers to obtain traditional human advice, so we should be careful for what we wish for.”
