28 Nov 2023

Why mortgage advice could be the best financial wellbeing benefit

With mortgage repayments the single biggest cost item for many people, finding a better deal could make a huge difference

The biggest issue facing UK employees at the moment is managing living costs, with a third of employees (32%) worried about rising mortgage and rental costs. Yet only 17% of workplaces offer mortgage advice as an employee benefit, according to YouGov Spotlight on UK Financial Wellbeing research carried out in July 2023 .

Mortgage repayments are the single biggest cost item for most people every month, so finding a better deal is likely to make the biggest difference to people’s personal budgets.

In light of this, more employers are realising that now is the perfect time to add mortgage advice to their workplace benefits.

The difference mortgage advice can mean

Case study: re-mortgaging

This couple, both employed, had a residential mortgage on their home. Their fixed rate repayment mortgage had recently expired and they were now on the lender’s standard variable rate, which meant their repayments were exceeding their budget.

Turbulence in the mortgage market meant they were worried they wouldn’t be able to find a fixed rate deal to meet their budget. They recognised that they couldn’t go on for many months repaying at the current rate, especially as they expected it to continue to rise and their repayments would spiral out of control.

The answer was to find a fixed-rate mortgage where the repayments were back in line with their budget. The Close Brothers mortgage team was able to quickly identify, arrange and complete a new fixed-rate mortgage for the couple, which gave them reduced monthly payments of over £500 per month.

Organisations looking to add a mortgage advice service to their workplace benefits should consider these aspects:

Check the qualifications and experience of the mortgage advisers.
Consider what type of advice will be given. Will the service review the whole market and arrive at an independent recommendation or is the provider linked to a particular lender or do they select from a panel of lenders, rather than the whole market?
Check if there is a cost to employees, or for your organisation. If there isn’t one, ensure you understand how the advisers will be remunerated – insist on transparency in all communications.
Which employees can this service help? For example, from first-time buyers to buy-to-let landlords, homeowners looking to remortgage, downsize or upsize. Others may need to access trickier arrangements such as bridging finance, second-charge loans and equity release.
Check whether the provider has experience in delivering this service in the workplace, providing reassurance for suitability, service levels and smooth and successful implementation and ongoing delivery.
Beside mortgage advice, what other resources are available to your employees as part of the service?
Is there a resource hub explaining the different types of mortgage, the steps in the process, with mortgage calculators and tools?
Is there a helpline? Is it manned by advisers or unqualified staff?
Is there any financial education provided so all employees can improve their wider financial understanding and confidence?
Does the provider offer one-to-one clinics, for individual employees to seek guidance?

A mortgage advice service will make a big difference and help ease the challenges employees are still facing in managing their normal living costs. It should not require a big capital outlay, it should be quick and easy to assess and implement, and, from day one, employees that use it should save money and reduce their financial worry.

Download details of the Close Brothers workplace mortgage advice service or email [email protected]