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Online mortgage brokers

These days you can find and apply for a mortgage at the touch of a button. Find out how online mortgage brokers work, the differences between sites including Habito and Trussle, and the pros and cons of using one.

In this article
How do online mortgage brokers work? Who uses online mortgage brokers? Online mortgage brokers compared
Can online mortgage brokers prevent over-borrowing? Pros and cons of using an online mortgage broker Should I use an online mortgage broker?

How do online mortgage brokers work?

Online mortgage brokers – sometimes referred to as 'robo advisers' – allow you to carry out most of the mortgage comparison and application process online, without speaking to a mortgage broker in person or over the phone. 

This might mean submitting details about your mortgage search to a chatbot, filling in an online form, or selecting options in an app.

Some of these services claim that you can find and apply for a mortgage in just 15 minutes – potentially much faster than speaking to a broker or carrying out extensive mortgage searches yourself.

However, there will still be paperwork to go through, and human mortgage brokers will always be used at some point in the process in order to make sure your application is correct and legally binding.

Who uses online mortgage brokers?

According to a 2019 Which? survey of over 3,500 homeowners, almost 40% used a mortgage broker when buying their current home. 

However, online mortgage brokers were far less commonly used than their offline counterparts: only 3% of homeowners in our survey used Habito, 3% used Trussle and 2% used Mortgage Gym.

Those who did use robo advisers had a number of different reasons for doing so. Some wanted 24-hour service, some thought they'd have a better chance of their application being accepted and some thought they'd have access to more deals.

Online mortgage brokers compared

Below, we look at how six of the biggest online mortgage brokers work, including how they make their money, who tends to use them, whether they will look at every deal on the market and how humans are involved in the process.

 

Habito

 

Market coverage: 20,000 products from 90 lenders. Habito can only match you with mortgages that accept applications from 'intermediaries' - i.e. brokers - but if there's a cheaper deal that you can only get by applying directly to the lender, Habito will flag this.

Free to use? Yes.

How does Habito make money? Lenders pay a procuration fee - a fee brokers are paid when they arrange mortgages on a homeowner's behalf. 

Who uses Habito? Over 170,000 people have used Habito. Half of these are looking to remortgage, and many others are first-time buyers. 

When do you speak to a human? After you've received your chatbot-generated recommendation. Human advisers can be contacted on live chat at any time. 

 

Trussle

 

Market coverage: 11,000 deals from 90 lenders.

Free to use? Yes.

How does Trussle make money? Lenders pay a procuration fee of 0.35%.

Who uses Trussle? Around half of customers are over 35 and 80% live outside London. Nearly 67% are looking to remortgage, and the rest are buying homes.

When do you speak to a human? After you've received your chatbot-generated recommendation. Human advisers can be contacted on live chat at any time. 

 

Dynamo

 

Market coverage: Works with a panel of 75 lenders, including specialist and mainstream. Residential, buy-to-let and second-charge mortgages are available, as well as bridging loans.  

Free to use? No. Dynamo charges broker fees of up to £999.

How does Dynamo make money? Lenders pay a procuration fee, consultants receive a commission. 

Who uses Dynamo? Around 75% of customers are remortgaging and 25% are buying properties.

When do you speak to a human? Once you've entered your details and received a quote. But you can speak to a human at any time if you need advice.

 

MortgageGym

 

Market coverage: Access to products from more than 100 lenders. 

Free to use? Yes.

How does MortgageGym make money? Mortgage advisers pay to subscribe to the service, and they are paid by lenders. This means they are independent advisers, rather than working for MortgageGym itself.

Who uses MortgageGym? First-time buyers, home movers and people looking to remortgage.

When do you speak to a human? Once you've entered your details and received a quote. But you can speak to a human at any time if you need advice. 

 

 

Mojo Mortgages

 

Market coverage: 20,000 deals from 90 lenders.

Free to use? Yes.

How does Mojo Mortgages make money? Lenders pay a procuration fee.

Who uses Mojo? Most customers are aged between 25 and 39. 

When do you speak to a human? You'll be asked to book an appointment with a mortgage adviser after completing an online form and receiving a recommendation. However, you can speak to an adviser at any point.

Can online mortgage brokers prevent over-borrowing?

While tighter regulations were introduced in 2014 to protect homebuyers from borrowing more than they could realistically afford to pay back, nothing is foolproof. 

Traditionally, affordability assessments have been used to see how much you spend – not just on bills, but gym memberships, eating out, holidays and childcare – as well as how much you earn.

A human mortgage adviser will go through your bank statements and take all of your outgoings into account when recommending a mortgage. 

Arguably, an algorithm is less able to account for these nuances and make judgments about whether you can really afford to borrow the maximum amount available to you for a mortgage.

Online brokers do have systems in place, however. For example, MortgageGym – which describes itself as an 'online mortgage platform' rather than a broker – has paired its service with Experian, meaning existing credit and borrowing commitments are automatically taken into account (and with only a soft credit check). 

The broker also plans to use open banking technology to better understand applicants' finances in the future.

Other online brokers have human mortgage advisers on hand who will look at credit reports, loan statements and other records to assess customers’ borrowing capacity, and check to see if the AI-generated mortgage options are suitable.

Any lender you find via an online mortgage broker will do its own income assessment, so you shouldn't be able to over-borrow even if a robo adviser doesn't check thoroughly.

Pros and cons of using an online mortgage broker

Searching and applying for a mortgage using a chatbot or app can be a convenient option for those who don’t have the time, knowledge or confidence to do it themselves.

Pros of online mortgage brokers

  • Flexibility: you don’t need a face-to-face meeting or phonecall before seeing recommended deals, meaning you aren't restricted to office hours – you can find a deal at any time of day, from wherever you are.
  • Less paperwork: papers are replaced with online forms, which can be filled out at your convenience. What’s more, some services will help you with these forms, too, meaning there's less chance of human error. You’ll be asked to provide documents to verify your identity and finances, but often these can just be scanned and sent over. 
  • Speed: the use of technology and algorithms means your mortgage options can be found more quickly than in a manual human search.
  • Low/no fees: in most cases, you won’t need to pay for the advice you receive from online mortgage brokers.

Cons of online mortgage brokers

  • Less opportunity for human judgement: fully automated services can sometimes overlook your individual circumstances – the cheapest deals aren’t always the most suitable options.
  • Less help in the early stages: a good mortgage broker will give you advice on saving and schemes before you’re ready to apply for a mortgage. Some online services offer calculators to give you an idea of how much you’ll be able to borrow, but in most cases this can't be classed as actual advice, and isn’t tailored to your situation.

Should I use an online mortgage broker?

This really depends on your circumstances and the kind of service you want.

For straightforward cases, particularly if you’re looking to remortgage, using a robo adviser can be a very quick and easy option – especially if you work unsociable hours and would struggle to find time to talk to a traditional broker.

If your circumstances are more complicated, however, you might benefit from having tailored support from an expert adviser earlier on in the process.

To find out about more traditional mortgage brokers, see our guide on choosing a mortgage broker.

Whether you’re thinking about using an online broker or a human one, you should always check to see whether they’re FCA-registered – you can search for them on the FCA’s database.

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