One in ten female home buyers claim they have faced mortgage discrimination
Nearly one in ten (9%) female mortgage applicants aged between 25 and 35 say they have been discriminated against by lenders over their plans to start a family
A quarter of women who have applied for a mortgage (25%) have intentionally hidden family plans from lenders, fearing they will miss out on the best rate or even be rejected
More than one in ten women (11%) would delay having a child to secure a mortgage on their dream home
Almost half (48%) save up to cover their mortgage and other bills before going on maternity leave
Eight in ten (79%) think lenders should take savings into consideration during a mortgage application and over one in four (27%) think the current affordability criteria is out of step with modern family finances.
Nearly one in ten young women (9%) who have applied for a mortgage in the last ten years say they were discriminated against by lenders on the basis that they were pregnant or intending to start a family, according to new research from https://www.uswitch.com/banking/>Uswitch.com, the price comparison and switching service. The research also reveals that a quarter of female home buyers (25%) say they have intentionally hidden their family plans from lenders, fearing they will miss out on the best mortgage rate or even be rejected.
Following the Mortgage Market Review in April 2014 and the introduction of stricter mortgage eligibility criteria, lenders may refuse to grant a mortgage if they believe an applicant is unable to meet the repayments due to an expected drop in income. But the perception that having a family may impact their ability to get the best mortgage deal is driving many women to withhold information from lenders during the application process, according to the new survey of 2,000 female mortgage applicants.
Of those confessing to hiding their plans from their lender, three quarters (77%) did so for fear of their application being rejected or missing out on the best rate. Unfortunately though, the pressure of concealing this information is having a significant emotional impact. 71% of women who concealed their family plans from lenders experienced high levels of stress and anxiety during the mortgage application process.
In order to cope with any drop in income, almost half of women (48%) save up before going on maternity leave, in order to cover monthly mortgage repayments and other essential household bills and 79% of women believe that savings should be taken into account when applying for a mortgage.
Overall, over one in four (27%) women think the current affordability criteria is out of step with modern family finances – but, in the meantime, over one in ten (11%) would put their family plans on hold to secure a mortgage on their dream home.
Tashema Jackson, money expert at https://www.uswitch.com/banking/>**Uswitch.com****,** says: “There is a strong feeling that mortgage lenders, rightly or wrongly, may be penalising women for starting a family. A worrying outcome is that some female mortgage applicants are feeling forced to withhold information from potential lenders. Not only can this have severe implications in terms of invalidating any mortgage offers, but it is causing stress and anxiety for home buyers at a critical time in their life.
“While it’s vital that lenders help people only borrow within their means and ensure they can afford future payments, it’s not fair for lenders to make blanket assumptions. Those planning a family may be able to manage their repayments even with a drop in household income, thanks to careful planning or savings. We believe lenders should be making decisions based on a broader picture of an applicant’s financial situation, including the amount that they have in savings, rather than on assumptions about a woman’s personal circumstances or intentions.
“If you feel that you have been discriminated against for any reason, you should lodge a complaint with the mortgage provider before escalating to the Financial Ombudsman Service.”
Uswitch.com commissioned the research following a number of enquiries the Financial Ombudsman Service (FOS) received from women who felt their mortgage applications were rejected because they were due to go on maternity leave.
For more information visit https://www.uswitch.com/banking/>**www.uswitch.com** or call 0800 093 06 07
FOR MORE INFORMATION
Katherine Moss
Phone: 020 3021 5893
Email: katherine.moss@uswitch.com
Twitter: @uswitchPR
Notes to editors
Research referred to in the release was conducted online by Censuswide from 10th to 14th September 2015 among 2,002 women aged 25-45 who've applied for a mortgage (either successfully or unsuccessfully) in the last 5 / 10 years, unless stated otherwise.
When asked ‘Have you, or someone you know, ever been rejected by a mortgage lender, or offered a less competitive rate, because you/they were pregnant, thinking about starting a family or of childbearing age?. 8.5% of women aged between 25 and 35 answered ‘I know I have’.
When asked ‘Have you ever hidden family plans from a mortgage lender?’ 10.7% answered ‘Yes I didn’t tell them I planned to have children in the near future. 6.2% answered ‘Yes, I didn’t tell them I was pregnant’. 3.3% answered ‘Yes I didn’t tell them I was on maternity leave’. 2% answered ‘Yes I told them I was to take shorter maternity leave than I planned to’. 1.4% answered ‘Yes I told them I was going to take shorter maternity leave than I planned to. 1.4% answered ‘Yes – other please specify. 10.7%+ 6.2% + 3.3% + 2% + 1.4% + 1.4% = 25%.
When asked ‘If you were told / made aware that your family plans may impact your ability to get a mortgage or re-mortgage, how might you primarily change your plans?’ 10.5% answered ‘I would delay having a child in order to secure the best mortgage offer’.
Those who answered they were planning to have children were asked ‘Which of the following did you/would you do to plan your finances ahead of maternity leave?’. 48.1% answered ‘Save in advance to have a pot of readily accessible cash to pay for the mortgage and other essential household bills’.
When asked ‘Do you think mortgage lenders should take savings into consideration when assessing your ability to afford a mortgage?’, 78.9% answered ‘Yes.
When asked ‘Why do you think mortgage lenders should take savings into consideration when assessing your ability to afford a mortgage?’, 26.6% answered ‘I believe that the current affordability criteria used by lenders is out of step with the way modern families organise their financial affairs’.
Those who answered that they had hidden family plans from lenders in Q3 were asked ‘What was your reason for hiding family plans?’ 39.8% answered ‘I was worried I would be rejected for a mortgage’. 36.7% answered ‘I was worried it would affect my ability to get the best mortgage deal’. 39.8% + 36.7% = 76.5%.
Those who answered that they had hidden family plans from lenders in Q3 were asked ‘When you hid your family plans from a mortgage lender, what impact did this have on you emotionally?’ 40.5% answered ‘I felt anxious. 30.3% answered ‘I felt stressed’. 40.5% + 30.3%=70.8%
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