A new digital mortgage broker has launched today (11 April) promising to find borrowers the best mortgage for them within around half an hour.
Backed by a £1.55m seed funding round led by Mosaic Ventures, Habito claims to use unique proprietary technology to analyse every mortgage across 100 lenders in seconds.
The best deal is identified based on individual circumstances, with an online application process aimed at completion within 30 minutes. A customer runs through a simple application, before an automated advice process attempts to map out the next five years of their finances and makes a recommendation.
Habito will then continually monitor the market and alert customers if a better deal ever becomes available, helping them switch if needs be.
Directly authorised by the Financial Conduct Authority, the service does not charge consumers a fee at the point of use.
Founder and chief executive Daniel Hegarty told FTAdviser the firm will make its money from the procuration fees offered by lenders, with anything above the 35 basis points average being passed back to the consumer “in order to remain impartial”.
He explained that Habito does not offer an execution only, self-certified or non-advised service.
“Although the ultimate responsibility for checking the appropriateness and affordability of the product lies with the lender, it’s of key importance to ensure that we do not submit applications to lenders that are likely to be rejected,” stated Mr Hegarty, adding that the firm validates identity, income and expenditure to ensure accurate advice.
“The regulatory liability for poor advice sits with Habito. We rigorously check every output of our advice process to ensure that these guidelines are met and exceeded.”
So far the firm has 10 employees, with a phone line available for those who prefer to talk with someone rather completing the process all online.
The next six months will see continual improvements of the platform, as more people use it, with further funding rounds likely later in the year to support its expansion, Mr Hegarty said.
“Technology has transformed our lives beyond recognition, so it’s hard to believe applying for a mortgage today remains no different from the difficult and often protracted process of 10, 20 or even 30 years ago,” he added.
Pete Mugleston, director of Online Mortgage Advisor, commented: “If it is seamless and works to help people apply online as advertised, then great!
“My concerns would be with borrowers who are unsure of the right answers to financial questions, as well as how the system would work with specialist lending in a world where criteria changes so frequently that broker knowledge is key to helping someone find finance.”
At the end of last week, another digital mortgage market challenger launched, but on the lender side. Atom Bank has also promised that its lack of physical branches and new digital processes will enable it to compete on price and transparency.
The investment advice industry has already seen several pension providers and wealth managers make tentative moves into what’s become known at ‘robo-advice’ over the last 12 months. The recently-published Financial Advice Market Review backed the trend, promising a dedicated regulatory team to work alongside its existing innovation ‘sandbox’.
peter.walker@ft.com
