World's first online mortgage broker launches in UK

A digital mortgage broker that claims it can save UK borrowers up to £29bn a year has become the world's first online mortgage service.

Habito, which launched in the UK this month, has secured £1.55m in funding and promises to use technology to analyse thousands of mortgage deals to find the right product for every consumer.

But would you trust a digital service, and where does the responsibility for the advice lie?

Service aims to match customers to mortgages within 30 minutes

Habito says it is “taking aim at the £95bn mortgage broking market, one of the only pillars of the consumer finance sector yet to benefit from technological disruption”.

The new service uses technology to analyse every mortgage on the market. It will look at thousands of deals across 100 lenders in seconds and promises to match customers to mortgages, via telephone or online, within 30 minutes.

Borrowers will run 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 mortgage market and alert customers if a better deal ever becomes available, helping them switch if required.

Daniel Hegarty, founder and chief executive, says: “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.

“It is an industry that has seen no meaningful innovation, yet technology can do so much to take the pain out of mortgages for consumers. It’s not right that millions of people are paying over the odds on the wrong mortgage. It’s time for technology to bring mortgages into the 21st century.”

Online service to take responsibility for advice

As part of the online process, the new digital service will validate a borrowers' identity, income and expenditure in order to ensure the advice it is providing is accurate. Habito will 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,” adds Mr Hegarty. “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.”