More than 46% of the online search market in the financial services sector is focused on mortgages, according to the 2015 Stickyeyes Consumer Finance Intelligence Report, with more than twice the search volume of the second biggest product area, loans.
Most of the traffic for the mortgages product comes down to just one keyword, ‘mortgage calculator’, which accounts for more than one third of search impression volume across the top twenty keywords across the entire financial services industry.
But why does the mortgage market perform so strongly online, and what is it about one keyword in particular that drives such a significant volume of traffic?
Low interest rates and a growing property market
During the summer of 2015, UK mortgage lending increased by 29% to its highest level since the peaks seen prior to the 2007 financial crisis (Council of Mortgage Lenders). Whilst it may be some time before we start to see lending reach the pre-crisis levels, it is largely believed that the market will continue to trend upwards into and throughout 2016.
We can see from Google Trends that there is growth in the market year-on-year between 2014 and 2015 and, whilst the peak months (typically January and April) demonstrate similar levels of search volume, 2015 experiences higher volumes throughout the rest of the year – as well as a stronger peak in August.
There are a number of factors behind this growth in the market. The economy in general terms has strengthened and this has come against a backdrop of consistently low interest rates, housing developers have recommenced building projects since the financial crisis, consumer demand in the market remains high and there have been a number of government initiatives to encourage property ownership, particularly the introduction schemes such as Help to Buy.
The effect of Help to Buy
There have been a number of government-led interventions and initiatives that have supported the mortgage market since the financial crisis, with Help to Buy and similar such initiatives proving to be popular amongst potential borrowers. Help to Buy is the fastest-growing keyword term in the mortgage industry, according to Google Trends, growing 160% from November 2013 to November 2015.
Help to Buy, and other similar initiatives, are having a notable impact on search volume around mortgage products. Whilst the search volumes themselves may be relatively low in the wider scheme of the market, there is a clear correlation between certain peaks in the market and particular ‘milestones’ for the Help to Buy scheme, such as the scheme’s launch in 2013 and the announcement of a government-backed Help to Buy Isa in 2015.
The ‘mortgage calculator’ keyword
The search engine results page for the volume phrase ‘mortgage calculator’ is distinctly different from many other types of results pages, and reflects Google’s on-going quality drive to deliver not only more relevant results, but listings that are more in tune with visitors specific requirements.
Google has inserted its own inbuilt mortgage calculator directly within the listing. This takes a highly prominent position just below the paid ads and directly above the organic results.
But the keyword ‘mortgage calculator’ itself is a keyword that has a number of potential meanings, and we see banking brands and advice websites ranking for different interpretations of a ‘mortgage calculator’.
Google’s interpretation appears to focus on calculating monthly payments from a pre-defined loan figure, or from calculating the total loan value from a pre-defined monthly payment. To this end, Google is therefore interpreting the phrase as a budgeting and a price comparison tool, which relies on the user knowing a total loan figure. This caters well for those users who know their loan value, such as those who may have an agreement in principle or those looking to remortgage to a more suitable product.
However, many of the banking brands have taken a slightly different interpretation, which is that the phrase ‘mortgage calculator’ is being used by users to determine mortgage affordability, and how much they could potentially borrow based on their financial circumstances. Whilst many of these calculators are quite rudimentary and make a number of assumptions to provide an estimate, they do at least represent an initial stage on the customer journey. Barclays is one such brand to take this approach.
Other brands offer both forms of calculator, as we can see from Halifax.
It indicates that brands are taking somewhat different approaches to serve this high traffic driving keyword term. Ideally, brands should be focusing on catering for any possible interpretation of this largely loose keyword term.
Will mortgages continue to dominate the sector?
The customer journey in the mortgages market is generally much more complex than many other product areas, resulting in online research providing a much more prominent role in the purchasing process. In that context, it isn’t surprising to see the ‘mortgage calculator’ keyword provide much of the search volume in this market. This keyword typically represents the first stage in the customer journey for both first time buyers and those seeking an indication on what they can borrow, as well as more qualified customers such as those looking to compare mortgage deals.
House building continues to lag behind demand and, with the cost and availability of housing likely to remain a major political discussion point for some time, it is likely that this market will continue to drive traffic volume in 2016 and beyond.
The market itself is also likely to remain increasingly competitive, especially if, as expected, interest rates continue to remain at a low level. Consumers are likely to demonstrate a willingness to lock themselves into a long-term fixed rates ahead of any rate increase, and this is going to be a key traffic driver for both financial brands and comparison websites in 2016.