Affordability calculators are the biggest technological drag in the mortgage application process, according to lenders who took part in Iress’ Mortgage Efficiency Survey.

The survey asked a collection of 36 lenders, who together made up 58 per cent of the UK mortgage market share in 2019, to talk about procedures and technological approaches towards five parts in processing mortgages: Pre-Dip and affordability, decision in principle, full mortgage application, offers, and completion.

It is in pre-dip and affordability that lenders expressed the lowest overall satisfaction, with high street lenders the least satisfied and challengers and specialists the most satisfied. Here, when asked about the level of automation and technological integration, lenders revealed that their calculators are often “built in Microsoft Excel” and standalone.

The report states: “Where a lender’s information or calculator does inform third-party sites, we did not encounter any examples of integration that were anything other than one-way from the lender to a portal or hub.”

While the report says that calculators are in focus for future development and were comfortable with the idea of a universal Dip, “others saw the security technology and data difficulties of doing this as being too onerous.”

Furthermore, “specialists with niche products had no appetite to integrate and continue to provide, and hose, their own models for lending areas… which do not lend themselves to easy calculations.”

The issue of comparing supplied data to that provided by the Office for National Statistics and finding a discrepancy that demanded more queries was seen as a “necessary evil.”

Open Banking, meanwhile, is still seen as too thorny an issue to pursue: “[It is] thought my most not to be worth the difficulty of obtaining a borrowers’ permission given the other sources available,” said some lenders against a background of others “acknowledging the perceived benefits in the medium- to long-term.”

Overall, the report highlighted the commonly held view that the Covid-19 pandemic accelerated many technological developments that were on the cards already and the effect is likely to continue.

Technology risks inherent in working from home were mentioned, though – from a wariness over private data being discussed over domestic phone lines and an increasing in ‘phishing’. One lender reported that it had brought more IT experience to its board as a result.

“Lenders all expressed the opinion that the pandemic had strengthened the need for advice,” adds the report, with borrower requirements set to become even more complicated in a post-pandemic world.

Iress’ principal consultant for mortgage lending Steven Carruthers comments: “While there continues to be a drive to automate as much as possible, a hybrid approach incorporating human interactions at key moments in the mortgage process is also proving important.

“Lenders recognise they need to continue to automate but the balance point varies between lender peer groups, and all see the value in this hybrid approach. Covid-19 has placed a laser focus on how lenders and their customers want to engage with each other from here. The powerful combination of technology and humans is at the heart of this.”