How AI is changing the mortgage application process

If you have started looking for a mortgage recently, there is a good chance you have used AI along the way.

Perhaps you have asked Chat GPT or Google Gemini what you might be able to borrow, used an AI-powered comparison tool to look at mortgage rates, or simply asked a question when you came across a term you did not understand.

AI is becoming another useful source of information for people researching mortgages. It can save time, explain complicated terms and help you get a feel for the options available.

But there is an important point to remember: AI can help you research a mortgage, but it cannot necessarily tell you which mortgage is right for your individual circumstances. That is where getting advice can still make a difference.

Can AI find me a mortgage?

AI can help you find and compare potential mortgages, but the results should be treated as a starting point rather than a personal recommendation.

You can ask an AI tool questions in much the same way you would ask a person. For example:

• How much could I potentially borrow?
• What is the difference between a fixed and tracker mortgage?
• What mortgage options are available to first-time buyers?
• Should I fix my mortgage for two years or five?
• Can I get a mortgage if I am self-employed?

For general questions, this can be really useful. Rather than searching through several websites to understand a particular mortgage term, you can get a straightforward explanation in seconds. It can also help you work out what you need to think about before speaking to a lender or mortgage broker.

The difficulty comes when the question becomes specific to you. Mortgage lending criteria can vary significantly between lenders, and the answer that applies to one borrower may not apply to another.

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AI-powered mortgage comparison tools

AI is also starting to change the way we compare mortgages. Traditional comparison tools usually ask you to enter information about your income, deposit, property and circumstances before showing a selection of products. AI can make this process more conversational, allowing you to describe what you are looking for and receive suggestions based on the information you provide. This can make the initial search much quicker.

It can also help you compare things that you might otherwise overlook. For example, you may be able to ask about the difference between a lower interest rate with a higher arrangement fee and a slightly higher rate with no fee.

However, a mortgage with the lowest rate is not automatically the best option for you. You also need to consider arrangement fees, early repayment charges, overpayment allowances, cashback and other features. The overall cost of the mortgage can be quite different once these are taken into account.

Most importantly, seeing a mortgage listed by a comparison tool does not necessarily mean you will meet that lender’s criteria.

Where AI can struggle with your circumstances

This is one of the areas where mortgage research can become more complicated.

If you have a straightforward application, you may find that online tools give you a useful starting point. But if your circumstances are less conventional, a generic answer may not tell the full story. For example, lenders can have very different approaches to:

• self-employed income and retained profits
• contractor and day-rate income
• bonuses, commission and overtime
• recent changes of employment
• historic adverse credit
• existing debts and financial commitments
• gifted deposits
• properties that do not fit standard lending criteria.

Two lenders may look at exactly the same circumstances and reach different conclusions about how much they are prepared to lend. This is why affordability is about more than simply entering your salary into a calculator.

A mortgage broker can look at the detail of your circumstances and consider which lenders are more likely to accept your application before you apply.

So, do I still need a mortgage broker?

A broker can be particularly valuable when you need to understand which lenders are likely to work for your circumstances, rather than simply which products are available.

A whole-of-market mortgage broker – like Exe Mortgages – can compare lenders and their criteria, helping to identify suitable options from across the market rather than limiting the search to one bank or building society. This can be particularly useful if you are self-employed, a contractor, have a complicated income structure or have had credit issues in the past.

There is also the practical side of the mortgage application. Finding a mortgage is only one part of the process. You still need to make the application, provide supporting documents, respond to questions from the lender and deal with any issues that arise during the underwriting process.

A broker can support you through these stages and, where appropriate, liaise with the lender on your behalf. That can be particularly helpful if your application does not fit neatly into a standard box.

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Don’t forget the small print!

It is easy to focus on the interest rate when comparing mortgages, particularly when rates are being discussed online. But there are other things worth looking at.

For example, what is the arrangement fee? Are there early repayment charges? How much can you overpay each year? Is the mortgage portable if you move home? Does a deal offering cashback or free legal work have conditions attached?

These details may not seem important when you first see a mortgage advertised, but they can affect both the cost and flexibility of your mortgage.

If you are using AI to compare products, make sure you check the information against the lender’s current product details. Mortgage rates and criteria can change, and an AI tool may not always have access to the most up-to-date information.

How are borrowers researching mortgages differently?

AI is changing the first steps of the mortgage journey. Rather than going straight to their bank or speaking to a mortgage broker, many people are now doing their own research first. They can use AI to understand the basics, look at potential borrowing amounts and get familiar with the terminology before having a conversation with a mortgage professional.

We think that can be a positive thing. The better you understand the mortgage process, the easier it is to ask questions and understand the options being discussed with you.

The important thing is to recognise the difference between research and advice.

AI can give you information. It can help you compare and understand. But it does not necessarily know all the details that could affect your mortgage application, and it cannot account for every lender’s individual criteria.

Using AI alongside mortgage advice

There is no reason why AI and mortgage advice cannot work alongside each other. You might use AI to understand what a tracker mortgage is, research the difference between two- and five-year fixed rates, or put together a list of questions you want to ask.

Then, when you are ready to look at your actual mortgage options, a broker can assess your circumstances, look at the available lenders and help you understand the products you are likely to be eligible for. Also use our mortgage calculators to understand how much you may be able to borrow, and what your repayments look like.

AI can make researching a mortgage easier and more convenient. Just remember that the mortgage that looks best on a screen is not necessarily the mortgage that will work best for you.

If you are unsure, getting the right information about your circumstances before making an application can save you time, avoid unnecessary applications and give you greater confidence in your decision.