Australians who are fed up with long mortgage approval times may have their problem solved with digital banking solutions.
Last week neobank 86 400 launched its digital mortgage offering with the application process done entirely through its smartphone app.
The bank is claiming the approval process is up to six times faster than the Big Four but there is a catch, applicants must seek out and visit an 86 400 accredited broker to begin the process.
Melissa Christy, 86 400 home loan lead, says: “Applying for a home loan shouldn’t mean trying to make a miracle happen. We have made the process transparent, easy to understand and quick so consumers can focus on finding their dream home rather than drowning in paperwork and unknowns.”
Westpac also announced its plans to digitise the home loan origination experience for both bankers and customers through the Customer Service Hub by 2020.
The Customer Service Hub has already been rolled out to St George, Bank of Melbourne and BankSA.
Brian Hartzer, chief executive of Westpac says: “It gives us the tools to materially improve the way we interact with customers across channels, products and businesses and the first wave will be live for Westpac mortgages by the end of the year.”
The capabilities of Westpac’s hub aim to deliver a 25 per cent reduction in the cost of mortgage origination, a lower cost of change, a 25 per cent reduction in banker processing time and a 50 per cent reduction in customer documents.
The 86 400 application portal pulls relevant information from the applicants’ accounts to pre-populate the application instead of manually uploading pay slips and statements.
The information is automatically categorised and verified so customers can see their financial situation clearly before applying for the loan.
Athena Home Loans and UBank are digital mortgage providers that have been offering loans since earlier in the year. Neither require a broker.
According to Athena it manages the end to end experience and make sure what they promise upfront stays true until the loan is paid off.
Athena says it does not use brokers to get business in the door, which attributes to its low cost loans. 86 400 has a different approach.
86 400’s Christy says: “With 60 per cent of all home loans being processed through brokers, we opted for an approach using selected accredited mortgage brokers. We believe this is the most efficient and effective way to connect our product with as many Australians as possible.”
The 86 400 home loans are available for purchasers, refinancers, owner occupiers and investors, is a fully featured loan, with fixed and variable rate options, both with redraw.
For owner occupiers making principal and interest repayments, the fixed loan rate is 2.88 per cent for a three-year fixed term. The variable rate starts from 3.09 per cent.
UBank’s owner occupier fixed loan rate is 2.69 per cent for three years. The variable rate starts at 2.84 per cent.
Athena’s owner occupier principle and interest rate starts at 2.84 per cent.
86 400 announced its partnership with Vow Financial and has since signed a partnership deal with Specialist Finance Group with a select network of 2,800 brokers.