Employers can support financial security by offering mortgage benefits

In April, consumer sentiment fell to 50.8, its second-lowest level in over 70 years. According to a recent CNBC survey, 73% of Americans are financially stressed, with 86% citing inflation and 75% citing interest rates as the top reasons for the stress. Needless to say, the prospect of buying a home right now is daunting for many Americans. 

For employers, that presents both a challenge and an opportunity: helping employees through what is arguably the biggest financial decision they will make in their lives — their home. A new category of employee benefits has recently emerged to meet that need: mortgage-as-a-benefit. These programs give employers a tangible way to support financial wellness while offering employees a leg up in a historically tough housing market. 

Employers are partnering with fintech companies to offer benefits that focus specifically on mortgages. This is not only helpful for employees, but also supports the employer's broader goals, including retention, productivity and talent strategy. 

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Return-to-office requires better benefits

A recent survey from LiveCareer confirmed that return-to-office mandates are on the rise despite most workers reporting a preference for remote work. The survey found that 91% of workers surveyed know someone who has been required to return to the office since 2023, and 60% of workers predict that more companies will mandate full-time in-office work in 2025. 

It's no surprise that many workers moved out of urban areas during the pandemic in 2020 and 2021, when remote work became the norm. And rising housing costs since then have only made returning more difficult. Now, with many companies requiring full in-person work, some employees are left with a difficult decision: relocate or find a new job. 

Unfortunately, that decision is far more complicated than it once was. Mortgage rates hit an all-time low in early 2021 at 2.65%. Today, they hover at 6.5% to 7%. That shift, combined with the dramatic increases in home prices from 2020, has made home buying significantly more expensive and return-to-office expectations that much harder to meet.

Benefits leaders have an opportunity to make this transition more feasible. Offering employees support like access to reduced interest rates on their mortgages and personal guidance from mortgage experts can help them make informed financial decisions and feel more confident in their next move. 

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A competitive edge in a tough hiring market

Outside of RTO, mortgage-as-a-benefit helps employers recruit new talent and retain their existing workforce. For example, a defense tech company with offices in places that aren't typical tech hubs is offering its employees mortgage benefits to help recruit hardware and software engineers out to more rural areas with a lower cost of living. Employees receive support throughout their homebuying process and access to competitive mortgage rates. 

A software company in Southern California offers mortgage-as-a-benefit to its employees, and one employee was so pleased with the benefit that she said, "You're stuck with me for the next 10 to 15 years because I'm retiring from this company." In her case, she became a first-time homeowner just 45 days after she started her search and locked in an interest rate nearly 2% lower than competitors. She also secured a low down payment and received assistance with closing costs, saving her thousands of dollars. 

Benefits that offer this level of financial support pay off, especially for employers when turnover can cost at least half of an employee's salary. Mortgage support becomes a smart, cost-effective investment (which in some cases, can be free for the employer) in employee retention.

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A real benefit for real-life stress

Buying a home has always been a stressful endeavor, but in recent years, the process has become more challenging than ever. Home prices have risen by about 45% since 2020, that, paired with stubborn interest rates and high inflation, has upped the stakes of buying a home. 

That stress doesn't stay at home. In a recent SoFi survey, a quarter of workers reported that "financial stress impacts [their] productivity/confidence at work." By offering expert guidance during such a high-stress process, employers not only help keep employees focused while they are at work, they also improve morale and build goodwill, which further assists with recruitment and retention. 

In a time of such economic uncertainty, employers would be remiss not to rethink their benefits strategy and strongly consider adding a mortgage-focused offering. Partnering with a mortgage-as-a-benefit provider allows the employers to offer this benefit to employees at no cost to the employer and with virtually no investment of resources. From helping with recruitment and retention, especially as companies increasingly prioritize in-person work, to improving employee productivity by providing support for an often complicated process, mortgage-as-a-benefit programs are a must-have for employers today.