Two in five mortgage holders switched banks for a better mortgage deal
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Of those who have a mortgage and switched banks, 41% did so to get a better mortgage rate deal and 30% did it to receive an incentive related to their mortgage
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Only 15% of people moving home switched their bank account during the move, while far more switched broadband (46%), energy (38%), and mobile phones (35%)1
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A majority (58%) didn’t review or consider switching their bank account when moving home, and 32% of this group didn’t even realise it was something they should consider
New research from the Current Account Switch Service has found that bank account switching is a relatively low priority when switching essential services, despite some bank switchers citing access to higher interest rates and better budgeting tools as reasons for switching.
In a survey of 2,000 UK adults who have moved home, either renting or buying, within the last two years, two in five mortgage holders who switched banks said they did so to access a better mortgage rate deal (41%), while 30% switched to receive an incentive related to their mortgage. But while over half of consumers (53%) spend five hours on average researching different parts of their move, few found time to assess their banking options, with just 22% looking into current accounts or banking options compared with around half who researched local property prices (50%), energy suppliers (48%) and broadband providers (48%).
Age plays a key role in bank switching behaviour during a home move
Younger home movers were significantly more likely to reassess their banking arrangements during a move. Half of those aged 18 to 24 (50%) and 25 to 34 (51%) reviewed or considered switching their current account, compared with just 30% of those aged 45 to 54 and fewer than one in five over-55s (19%). This translated into higher switching levels among younger movers, with more than one in five 18 to 24-year-olds (22%) going on to switch – more than two and a half times the proportion of over-55s who did so (8%).
Conversely, 67% of over-55s said they would not normally consider reviewing their bank account at all during a move, compared with 25% of 18 to 24-year-olds, suggesting many older home movers may be overlooking potential benefits such as better rates, incentives and money management tools at a time of significant financial change.Those who switch banks reap the rewards
Of those who own a mortgage and switched banks, two-fifths (41%) switched to take advantage of customer-only deals and mortgage rates. Just under a third (30%) switched to receive an incentive related to their mortgage and 28% switched to access higher interest rates on their deposit.
Others switched to take advantage of additional perks (41%), secure better budgeting tools or money management (29%), and to simplify their finances by consolidating accounts (29%). Despite these benefits, a majority (58%) of home movers didn’t review or consider switching banks as part of the process.
The Current Account Switch Service strongly advises consumers to seek financial advice from existing and potential lenders before switching bank accounts.
John Dentry, Product Manager at Pay.UK, owner and operator of the Current Account Switch Service, said: “Moving home is one of life’s more stressful milestones, and at a time when every pound counts, consumers need to be unlocking all the help they can get. With rates well above the low figures of a few years ago, taking time to compare current account options alongside mortgage arrangements can make a real difference, as could extra interest on your deposit, improved financial planning tools and tailored mortgage advice.“ As the backbone of your finances, you should take your choice of banking provider seriously and ensure your current account is meeting your needs and goals. If you decide to switch, it won’t add any burden or cost. You simply pick a new bank or building society, request a switch, and we’ll do the rest within seven working days. It could be the easiest move you make!”
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