Monzo, the UK’s leading digital bank with more than 11 million customers, has revealed that outdated mortgage systems make it difficult for the UK homeowners to manage their mortgages effectively.
To help homeowners save on interest, reduce mortgage terms through overpayments and secure better deals, Monzo is calling for the government to urgently press ahead with industry-wide mortgage data sharing through Open Finance as part of the Data Use and Access Bill.
Monzo’s survey of 4,000 UK adults conducted by Censuswide reveals significant gaps in understanding and barriers to huge savings and better deals. It reveals that UK homeowners could have up to £5.3 billion that they would like to put towards overpayments annually but don’t have the tools or knowledge - this could save UK homeowners an estimated £2.3 billion on mortgage interest each year. The research comes shortly after the Bank of England reported that nearly half of households expect to face increased mortgage costs over the next two years.
Key Findings:
• Most important financial commitment: almost three-quarters (74%) of UK mortgage holders see their mortgage as one of the most important parts of their financial life.
• Desperate need for better tools: 51% want a better way to manage their mortgage, and 36% say it would motivate them to reduce debt with 69% of first-time buyers wanting to reduce their mortgage debt, term or interest.
• Sparse updates by post: nearly a third (30%) of mortgage holders still rely on physical statements by post to track their mortgage.
• Lack of confidence: nearly a quarter (23%) of mortgage holders are unsure of their interest rate, 14% don’t know when their deal expires, and 40% lack confidence in understanding the impact of overpayments4.
• Homeowners held back: Only 34% of mortgage holders currently make overpayments - 3 in 10 of those who don't overpay, stated that they don't do so due to friction or a lack of understanding of the impact of overpayments.
• Widespread misconceptions: Many homeowners mistakenly believe they need to overpay by £150 or more each month to make a difference. In reality, just £50 a month could cut 1 year and 10 months off a typical £195,000 mortgage and save nearly £7,000 in interest over the term of the mortgage.
• Impacting mental health: 33% report stress or anxiety due to limited visibility over their mortgage.
Monzo is already transforming mortgage tracking as the first bank to let customers view their mortgage details directly in the Monzo app, regardless of who their lender is. Around 300,000 homeowners benefit from this tool - which includes features like interest rate tracking, deal reminders, and a personalised savings calculator for mortgage overpayments. Monzo also uses data from Land Registry and ONS to give monthly home value updates, helping customers track their equity and find ways to secure better rates when their deal ends.
However, to deliver more, including savings and better deals for homeowners, urgent action is needed. Mortgage data shared among financial institutions is often sparse and delayed, which is why Monzo is calling on the Government to act quickly to deliver Open Finance in the UK.
James Shafe, Public Policy Director at Monzo, said:
"Homeowners could be saving large amounts on their mortgage but are held back by outdated systems. We’ve heard from customers that they want better tools to make decisions about their mortgage. Open Finance can help people reduce debt, the amount they pay in interest and the length of their mortgage term, saving money in the long run. Now is the time for the Government to deliver on their ambition for the UK to be a world leader in Open Finance and put more control in the hands of customers.”