The people using AI for mortgages and insurance – and how it saved them money

When Thomas Savage applied for a mortgage in principle, he was told that he could borrow £184,387. The 29-year-old financial account assistant, who works in London but lives in Crawley, West Sussex, said that buying in the capital had “always felt out of reach, particularly as a single buyer“. “I was curious to see how far away I realistically was from getting onto the property ladder and owning a one-bedroom flat.” For Thomas, the figure he was given was lower than he expected. “So I turned to AI for a second opinion,” he said. The AI model he used gave him a realistic borrowing range, rather than simply agreeing or disagreeing with the £184,387 decision in principle. The range showed he could potentially borrow more and also explained factors affecting how much he could borrow. Savage is not expecting AI to replace professional mortgage advice but wanted to sense-check the figure and better understand his options, without having to go directly to an adviser. While professional advice – rather than a computer derived mortgage in principle – could easily have provided the information he got, he says he would “definitely” use AI again before approaching a broker or adviser, to better understand his position and enable him to ask more informed questions. Savage’s experience shows how, for some, AI offers a quick, pressure-free way to understand mortgages, insurance and financial planning. But while chatbots can help some people, they cannot necessarily replace the expertise, accountability or personal understanding that comes with professional advice.Brian Byrnes, director of personal finance at Moneybox, said: “What Thomas has done is an excellent use-case for how people should be using AI for personal finance matters. He’s using it to build his understanding rather than treating it as financial advice.” But Byrnes warned that AI cannot account for someone’s full financial circumstances and may not reflect live lender criteria. He said figures generated by chatbots should be checked against official lender websites or with a qualified adviser. For James McNally, 53, AI proved useful in a different way, helping him check the small print on a business insurance policy. James, managing director of Self Drive Vehicle Hire in London, was reviewing a fleet insurance quote covering 14 vans, with an annual premium of about £18,000. Although his broker had explained the terms, he wanted to make sure he had not overlooked anything before signing. James McNally, 53, said the information the chatbot gave him was useful but he did not act on the advice without double checking it He said: “I know I skim long documents when I am busy, and I wanted a second check before I signed it. So, I removed our company name, pasted the policy wording into an AI tool and asked it to flag any clause that could cost us money. “My first prompt was too general, so I asked again with the exact policy section. The clearer reply flagged an excess clause I had skimmed past, a higher excess on any van left unattended overnight. I worked out it could cost us roughly £1,200 more on a single claim.” Crucially, he did not accept the chatbot’s answer without checking it. He took the question to his broker, who explained why the clause had been included and negotiated it down to match the rest of the policy. He signed the amended quote that week. While AI may leave professionals in many industries concerned about the future of their jobs, Zoe Dagless, founder of Meliora Financial Planning, said advisers shouldn’t automatically view clients’ use of AI as a threat. She was shocked when a new client revealed they had put their financial plan through an AI chatbot to check whether their money was working as hard as it could. “Had they not trusted me? It was like my work was being marked,” Dagless said. The client had become concerned about falling behind friends on pension savings after turning 40 and wanted reassurance they were making the right decisions. “They were also used to turning to AI for everyday questions, from work tasks to choosing a living room colour. So, why not use it to check their finances?” she said. Fortunately, the AI produced a plan remarkably similar to Dagless’s own. Rather than undermining their relationship, the experience reinforced the advice she had already given. Dagless believes there is nothing wrong with seeking a second opinion, particularly when AI can help explain unfamiliar terms relating to pensions and ISAs. But she warned that confidence should not be mistaken for accuracy. “AI can analyse the figures and produce a financial plan, but it can’t always get to the heart of what someone’s money is actually for,” she said. Privacy is another concern, with Dagless warning people against sharing sensitive financial details without understanding how a chatbot stores and uses their information. There is also a crucial difference between AI and regulated financial advice. Professionals have responsibilities and potential routes for redress if something goes wrong, whereas chatbots do not offer the same protections. For advisers, the challenge may be to recognise that clients increasingly want to check what they are being told, rather than assuming this signals a lack of trust. What AI can and can’t do with your money, according to financial planner Zoe Dagless AI can: – Explain mortgages, pensions, ISAs and insurance terminology. – Help you compare options and identify questions to ask. – Summarise lengthy policy documents and flag clauses worth checking. – Help you understand what information a lender or adviser might need. AI can’t reliably: – Tell you exactly how much a lender will offer you. – Guarantee that financial or tax information is accurate and up to date. – Replace advice tailored to your complete financial circumstances. – Negotiate with lenders or insurers on your behalf in the way a broker can. – Provide the same regulatory accountability and routes for redress as a regulated financial adviser. How to use AI for your finances safely – Use it to understand, not decide – ask AI to explain unfamiliar terms, summarise mortgage options or identify questions to ask an adviser. – Check the figures – AI can get calculations wrong or rely on outdated information. Verify figures with official lenders, providers or a qualified professional. – Protect your personal information – avoid uploading bank statements, pension documents or other sensitive financial details without understanding how the tool handles your data. – Ask it to explain its reasoning – if a chatbot recommends something, ask what factors could change the answer and what assumptions it has made. – Get professional advice for big decisions – AI cannot fully assess your circumstances or offer the same regulatory protections and routes for redress as a regulated adviser. – Use it to prepare questions – take anything concerning or unclear to a qualified adviser rather than acting on a chatbot’s answer alone.