Online home loan broker iSay has entered the online mortgage market, promising to provide the most "intensely personalised, non-face-to-face" mortgage brokering service in Australia.
Launched today, the Craig Winkler (MYOB CEO)-backed venture, will offer a research-based "choice model" of online mortgage application.
The broker will be panelled by nine banks including Westpac, Colonial and Macquarie.
The "beauty" of online mortgaging lies in the efficiency of the application process, said Martin Collings, iSay's CEO.
"We're huge believers in the internet. Rather than being a 10-page long confusing application, we only show you the information you want to know," he said.iSay also offers the "AppTracker" facility allowing users to dynamically check the status of their application. "It demystifies the mortgage tracking process," Collings said.
He added: "We're the only ones who guarantee we automatically send you an email informing people when they need to refinance."
Collings claimed iSay is the first broker to offer an online service built on "trust".
"Once you hit the apply button, you get the personalised service of a dedicated consultant, rather than flicking (the application) to anyone," he explained. iSay also emails the consultant's mobile phone number to customers, making the staffer available any time to answer queries.
Collings is betting the startup will provide the "fairest" mortgage brokerage service in Australia. iSay will only accept identical commissions from its nine lenders to guarantee impartial selection of home loans.
The number of people researching mortgages online is around 50 per cent of customers, according to Collings.
"People want the supermarket choice model for mortgaging," he believes. Consumers have been "too sceptical" of lenders, convinced they are more interested in sales commissions than customer satisfaction, Collings added.
"You've got to let customers build up the trust on a banking site," he said. iSay will "remove all the roadblocks" by letting users research and monitor the accuracy of interest rates being charged.
ABS statistics reveal that 10 per cent of consumers buy mortgages online, up from 5 per cent in 1999. The average loan size in the last 12 months was $135,379, according to the ABS.
Collings is confident iSay will capture an "uncapped market"of 180,000 online home loans in the next 12 months.
The online mortgage market has strong growth potential, according to Chiko Wong, analyst director at www.consult.
Online banking increased by 400 per cent from 1999 to 2000, Wong said. While the growth was comprised of non-value based transactions such as bill payments and fund transfers, Wong feels high-income earning ($70K+) internet users who are becoming increasingly "time poor" will opt for online mortgaging instead of branch level negotiation.
"Customers no longer have a personal relationship with their bank manager," said Collings.