OpenMoney, a Manchester-based firm attempting to ‘democratise’ the advice world, has launched its online mortgage advice service for first-time house buyers, a year after its initially planned date.
The platform already offers consumers free debt and money guidance as well as hybrid human-online regulated advice for a fee. Now it is taking on the mortgage advice sector, with a rosta of around 50 lenders.
OpenMoney had initially planned to launch its new product last July but this was postponed due to the coronavirus crisis.
The start-up’s new service advises consumers on their mortgage lender, insurer, surveyor, and solicitor, providing recommendations and document upload tools.
It is offered to borrowers for free but OpenMoney receives a commission from the lenders on any products sold.
“Buying a property is expensive and we fundamentally disagree with mortgage providers that charge people for advice,” said Anthony Morrow, OpenMoney’s co-founder.
OpenMoney stressed it is “not a comparison site”. “We give regulated advice based on what a mortgage adviser would do in real life,” the firm says on its website.
Customers have “the option to talk to human advisers by phone when needed”, but advice is largely delivered through its digital shopfront.
Its expansion into the home market sector is the firm’s “next step” in ensuring “everyone has access to free financial advice”.
“By adding ‘home’ to the list of services we offer, we can arm more customers with personalised, tailored advice, giving them confidence that they are making the right financial decisions,” said Morrow.
Karina Hutchins, OpenMoney ‘Home’ head, added “the process [of homebuying] can be confusing, involving multiple parties and so much jargon that it feels overwhelming, especially for first-time buyers.”
“Our new service aims to simplify the process and guide customers through the whole home buying journey to ensure they understand the impact different mortgages will have on their finances and which products they need and where to find them.”
The firm operates a similar model to rivals Mojo Mortgages, a digital broker, and digital estate agent Strike, which landed an £11m funding round led by Direct Line founder Sir Peter Wood earlier this month.
The digital advice market has enjoyed a flurry of interest from fintechs. In March, saving and investing app Moneybox entered the mortgage advice market.
It pays its advisers a set salary rather than commission, and enables customers to receive a decision in principle on their mobile phone.
But advisers do not appear to feel threatened by these sorts of services. “It’s [OpenMoney] just a mortgage brokerage that is using a good online platform to help with their business with a good marketing team to say they are revolutionising the mortgage industry.
“Also, they are only after really easy cases - ‘being employed people in England and Wales’ - whereas the sign of a good adviser is being well-rounded and able to justify complex cases to lenders, such as self-employed cases.