Mortgage Broker Broadcast
Developing your knowledge to help you build a successful Mortgage Broker business. Craig Skelton shares his thoughts and experiences on all aspects of mortgage advice covering everything from operating in the banking world, estate agency based advisers all the way up to working as a self employed broker. He will be joined by experts from within the industry and other business sectors which all play a key part in becoming a successful mortgage broker in the modern world.
Mortgage Broker Broadcast
How UK Lenders Use AI To Keep Mortgage Customers And What Brokers Must Do Next
A quiet revolution is reshaping mortgage retention in the UK: lenders now use AI to spot churn, price smarter, and send personalized offers long before a fixed rate ends. We unpack how those engines work, why they’re so effective at capturing product transfers, and what that means for brokers who have built pipelines around renewals. The story isn’t doom and gloom; it’s about timing, experience, and the kind of advice that a one-click journey can’t replicate.
Together we map the new retention funnel from data to decision: servicing history, property values, and behavior signals feed models that predict who will switch and when. Then come targeted prompts via email, text, and apps, with pre-filled applications and instant eligibility checks. We explore dynamic pricing, segmentation for landlords and high-net-worth borrowers, and the commercial reality of PT fees. You’ll hear where lenders gain ground through convenience and where they still fall short when clients need capital raising, term changes, debt consolidation, or later-life solutions that demand real guidance.
We share a practical broker playbook to stay indispensable: use AI-powered CRM triggers to contact clients months before the bank, deliver clear comparisons and scenario planning, and match digital ease with secure portals, e-signatures, and video reviews. Educate clients on the difference between information and advice, lean into Consumer Duty to demonstrate suitability, and diversify into specialist lending and protection to reduce reliance on simple PTs. The takeaway is simple: algorithms can nudge, but trust wins decisions when stakes are high.
If this conversation helps you rethink your strategy, subscribe, leave a review, and share it with a colleague who needs a fresh retention plan.
I help employed mortgage brokers go self-employed with clarity, confidence and one-to-one mentoring. Find out how Pathways or Coaching works at craigskelton.co.uk
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Hi, and welcome to this week's The Mortgage Broker broadcast. I'm your host, Craig Skelton. Following on from our recent chat with Iftika about AI in the mortgage broker world and the episode that recorded on the FCA's advice trigger rule change, today we're focusing on something that's getting quite a lot of traction and attention in the UK mortgage world right now. I'm talking about how lenders are using AI to retain their customers and what that means to you if your business relies solely on product transfers. Well, lenders are investing heavily in technology to keep their customers. And as brokers, we need to understand what's happening so we can adapt and continue to deliver value. Why does retention matter and what's changing? Well, the size of the product transfer market in the UK is huge. Over 2 million mortgages came to an end this year. And as we know, nearly all new mortgages are generally fixed. And in the next 12 months, millions of borrowers will need to choose a new rate. Purchase transactions have slowed down, house purchases and buy-to-light lending has dipped depending on who you're talking to. So lenders are turning their attention to retaining existing clients. And if you go back a few years under the old rules, brokers didn't always get paid for helping clients switch rates. That changed a few years ago when proc fees for PTs came in and they were introduced. Now most mainstream lenders pay brokers for arranging retention deals. But even so, less than half of all product transfers happen through brokers. Many borrowers still switch online without advice. Some lenders pay the same fee for retention deals as they do new business, while others pay less. And there's a debate on how big the intermediary channel will be in this market in the future. With banks improving their digital processes and direct-to-consumer platforms, some people suggest that brokers' share of the PT market could shrink. Others argue that advisors will remain vital because consumers value guidance. We've already got evidence of why lenders are excited about digital retention. Back in 2018, several UK banks built self-service systems, allowing existing clients, existing customers to switch to a new rate online. Customers receive an email or a letter with an offer before their current deal expired and would complete the transaction in minutes. At that time, around 45% of all product transfers were execution only, meaning the customer just clicked through without speaking to a broker. Since then, technology has moved on massively. Lenders have invested in cloud-based mortgage platforms and AI-driven decision engines. Some lenders now offer fully automated processes. The customer logs into their account, presented with personalized offers, and can confirm the switch online, back office systems, check eligibility, complete affordability checks and eligibility assessments too, generate a confirmation of the new rate and monthly payment, all without human intervention. And this year we've seen the UK banks step up their technology investment. High street giants like HSBC, Lloyd's Banking Group, Nat West, along with the small like the Challenger ones as well, like Starlin Tandem, have committed billions of pounds to AI and digital infrastructure. This investment isn't just hype, but by combining servicing data, property valuations, and transaction history, lenders can identify which borrowers are likely to remortgage long before their fixed rate ends. When a borrower's deal is nearing expiring, the system can automatically generate a personalized email or text, or just send a push notification via the mobile app and include a pre-populated application link. Customers just tap through, review the new rate, and if satisfied, accept the switch. And lenders can even run multiple pricing scenarios instantly to offer the most attractive rate while maximising their profit. So, what does AI retention actually look like? Think of it as like a sophisticated blend of data analytics, machine learning, and automated marketing. AI-powered platforms monitor everything from payment history, account balances to life-changing events such as like house move or promotion or growing family. When a fixed-rate deal is within six months of expiring, or when market conditions mean a borrower could benefit from a switch, the system triggers communications. These messages range from simple reminders that a deal is ending to fully personalized offers tailored to the customer's risk profile, loan-to-value ratio, and income. Some systems segment the lender's database and can send beespote campaigns to different types of clients like first-time buyers, landlords, high net worth borrowers, while others use predictive models to flag at-risk customers who might be tempted by competitor offers. Importantly, these tools aren't just about dropping the rate to keep the customer. There's a growing recognition that slashing margins isn't sustainable and may even harm profitability. Instead, AI platforms focus on giving customers timely information, reminding them when their fixed term ends, outlining their options, making the switching process seamless, and crucially highlighting why staying with them, staying with their current lender could be beneficial. So why does customer experience matter? Well, borrowers care about convenience, speed, and trust. If the lender reaches out early with a competitive offer and a slick digital journey, many customers will just accept it rather than going shopping for alternatives. So why does this pose a challenge to brokers? If your business model relies heavily on arranging product transfers, the adoption of AI-driven retention strategies by lenders could erode your pipeline. Lenders are effectively replicating some of the work advisors have traditionally done, tracking when a fixed term expires, predicting when clients would need to switch, and sending tailored offers. Because lenders hold the borrower's data and history, they can pre-populate applications, making the process quick and effortless. And in some cases, the customer can complete the transaction online in minutes. When the lender reaches out first with an attractive product and a frictionless journey, the client may not see the need to console a mortgage broker. There's also a commercial aspect of this as well. Retention prop fees are often lower than those paid for new business. If lenders invest in their own AI-driven retention infrastructure, they may decide to pay lower fees or even bypass brokers entirely for straightforward switches. Combine that with the recent removal of the automatic advice trigger, the rule that previously required advice when there was an interactive dialogue, and you create like a landscape where more borrowers could proceed without advice. It's easy to see why some people predict that the broker sector might shrink. However, there is good news for advisors, despite the technology, human expertise remains critical. UK consumers still overwhelmingly favour advised mortgages, particularly when circumstances are complex, such as capital raising, debt con, changing the term length, or borrowing into retirement. And even with AI, lenders must comply with the consumer duty and identify customers who might suffer harm if they proceed execution only. For these customers, the lender must offer support or advice. In addition, lenders recognize that brokers act as trusted partners who bring them new clients and help keep their existing ones. There's also evidence that digital innovation alone doesn't guarantee retention. According to industry, according to some industry experts, borrowers with the strongest credit profiles and highest affordability are often the ones likely to switch away from their existing lender. Many clients have multiple banking products with their current lender, yet still move their mortgage when their deal ends. This shows that relationship depth alone doesn't always secure retention and that even well-served customers will look for a better deal. For brokers, this is encouraging. Your clients value not just the product but the personal advice and long-term strategy that you provide. AI may automate routine tasks, but it cannot replace trust, empathy, and the ability to navigate complex situations. So, what can brokers do to stay ahead? Well, you need to adopt AI tools yourself. You don't need a bank's resources to leverage predictive analytics and marketing automation. Many platforms now integrate with broker CRMs, letting you track client anniversaries, birthdays, products end dates, rate changes, and life events too. Use these insights to send personalized reminders and offer weeks or even months before client even hears from their existing lender. You can also deepen client relationships. Don't only reach out when your deal is ending, when their deal is ending. Schedule regular mortgage reviews and send newsletters about market developments and share insights on topics like protection, late life lending if that's relevant, and property investment too. The more that the client sees you as their financial guide, the less likely they are to respond to a generic retention offer. And you can educate clients about the advice versus information. Make sure your clients understand that an execution only transfer may be quick, it could be quick, but it shifts responsibility onto them. Explain that you not only look at interest rates but also their future plans, family circumstances, risk tolerance, clients who understand the value of advice and more willing to pay for it. And you can diversify your income streams. If product transfers make up the bulk of your revenue right now, think of expanding to like more specialist needs lending, self-employed borrowing, adverse credit, later life lending too, protection, estate planning, full financial advice. These areas require specialist knowledge and are less likely to be overtaken by automation. And then you can focus on service and convenience. Digital efficiency is non-negotiable. Offer secure online fact finds, e-signatures, document portals, video consultations. Clients expect seamless processes right now in our world. If you can deliver that alongside that personal service, your match also passes the lender's direct journey. You also need to monitor the lender's retention tactics. Pay attention to when and how lenders contact your clients. If a bank sends product transfer office three months before the deal ends, you need to be doing it four months ahead, six months ahead. Being proactive shows clients that you're on top of their needs. And embrace the consumer duty, use the new rules to your advantage. Emphasize that part of your job is to ensure the recommendation is suitable and that clients fully understand the implications. This helps differentiate your service from a purely transactional. And then also you can review your business model. Given the speed of technology right now and the change that's happening, take this quarter at the end of the year to examine your revenue mix, client communication, the processes, technology, and invest in systems that make it easy to segment your client base and automate messaging and track outcomes and refine your approach. Looking ahead, AI investment in the UK mortgage sector will only increase. By the end of next year, most lenders are expected to have AI-powered retention engines. We may see dynamic pricing that adjust retention offers in real time based on churn scores or AI agents that execute multi-step tasks like collecting documents, updating valuations, and issuing product offers without human intervention. At the same time, regulars will continue to scrutinize how firms use data and ensure customers are treated fairly. That means brokers who combine technology with a human touch, regulatory awareness, and diversified services will not just survive but thrive. So that's it. That's this week's podcast. We're getting into AI-powered retention in the UK and what it means for brokers too. The game is changing, there's no doubt about that, but so is the opportunity. By embracing technology, focusing on service and educating clients on the value of advice, you remain indispensable in a market that's rapidly evolving. So if you found this episode helpful, as always, please share it, please leave a review, please subscribe, as always. Thanks for listening, thanks for watching, have an amazing week, and as always, please don't forget to run your own race.