Mortgage rates are prompting some borrowers to switch banks as buyers continue to look for ways to reduce the cost of moving home.
New research found that 41% of mortgage holders who changed banks did so to access a better mortgage deal.
A further 30% switched to secure an incentive linked to their mortgage. Meanwhile, 28% wanted higher interest rates on their savings.
The findings highlight the importance of mortgage costs to buyers as affordability remains under pressure.
Mortgage deals influence borrowers
The Current Account Switch Service surveyed 2,000 UK adults who had bought or rented a home within the previous two years.
Despite the focus on mortgage rates among those who switched, changing banks remains relatively uncommon during a home move.
Just 15% of movers changed their bank account. By comparison, 46% switched broadband provider and 38% changed energy supplier. Some 35% switched mobile phone provider.
More than half of home movers spent time researching different aspects of their move. However, only 22% investigated current accounts or alternative banking options.
By comparison, 50% researched local property prices. Some 48% looked at energy suppliers and the same proportion researched broadband providers.
Overall, 58% neither reviewed nor considered switching their bank account during their move. Almost a third of this group did not realise they should consider doing so.
Younger movers more likely to switch
Age also played a significant role in switching behaviour.
Half of 18 to 24-year-olds considered reviewing or changing their current account. The proportion increased slightly to 51% among those aged 25 to 34.
However, that fell to 30% among 45 to 54-year-olds. Just 19% of people aged over 55 considered making a change.
Younger movers were also more likely to follow through with a switch.
Some 22% of 18 to 24-year-olds changed their bank account during a move. That compares with just 8% of those aged over 55.
Affordability remains central to moving decisions
The findings suggest borrowers are looking beyond headline property prices when assessing the overall cost of moving.
Mortgage rates can materially affect monthly repayments and borrowing capacity. As a result, access to a more competitive deal can influence how buyers structure their finances.
For estate agents, continued sensitivity to mortgage pricing remains important. Changes in borrowing costs can affect budgets, purchasing power and whether prospective buyers proceed with a transaction.
However, the research also suggests most movers do not reconsider their wider banking arrangements. Current-account switching remains far less common than changing other household services.
The Current Account Switch Service advises borrowers to seek financial advice from existing and prospective lenders before changing 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!”
