Consumer choice in mortgage loans cross-selling

Abstract

PURPOSE: Mortgage loans are offered by banks in cross-selling practices with other financial products, of which insurance is the most significant addition product. The main objective of the article was to presents the result of a study whose cognitive goal was to assess the consumer-borrower's ability to choose a home loan offer and to identifying corrective solutions that could enhance the market position of consumer-borrower in the relationship with banks.

DESIGN/METHODOLOGY/APPROACH: The study conducted a comparative analysis of mortgage loan offers available on the Polish market in 2022. The study included offers from the 10 largest banks: PKO BP, Bank Pekao, Santander, ING, BNP Paribas, mBank, Millennium, Crédit Agricole, Alior, and Citi Handlowy. The research apply a triangulation method combining various research techniques including interviews, document analysis, and the mystery shopper method.

FINDINGS: The results of the survey shows that consumer choice in the mortgage market is significantly restricted. The legislator recognizes the imbalance problem between consumerborrowers and banks in the mortgage market and regulates rules of tying and bundling practices. However, current regulations remain insufficient. It seems that in this case, consumer choice would become more genuine if lawmaker introduced a minimum level of insurance cover. Reducing the variability in options would make consumer choice more realistic.

PRACTICAL IMPLICATIONS: The application goal of the study was to formulate recommendations, the implementation of which could strengthen the position of consumerborrowers in the bancassurance market and thereby contribute to improved efficiency and fairness in the market's operations.

ORIGINALITY/VALUE: This research reduce existing research gap by showing banks practices in offering mortgage loans together with additional products (particularly insurance). There is a need in economic literature to show the consequences of cross-selling mortgage loans and insurance products.