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Would you use an online mortgage broker?

We explore the rise of the 'robo adviser' and why more people are using online mortgage brokers

Increasing numbers of people are turning to the web to find and apply for a mortgage – but how does this work, and what are the pros and cons of taking financial advice from a robot?

Around one in three (35%) homeowners apply for their mortgages using a broker, according to a June 2018 Which? survey of over 3,000 mortgage holders. Of those, 8% had used an online mortgage broker, or ‘robo adviser’, such as Habito or Trussle.

Below, we reveal the reasons why people do – and don’t – use online mortgage brokers, and explain the main differences between robo advisers and traditional brokers.

Why do people use online mortgage brokers?

Online mortgage brokers, sometimes referred to as ‘robo advisers’, enable you to search and apply for a mortgage on the internet.

Our survey found a variety of reasons for people using online brokers. The most common reason given was that they wanted to compare the deals offered by an online broker with what they could find themselves.

Some people expressed a preference for indirect communication, with 17% saying they’d rather chat online than have a spoken conversation, while perhaps surprisingly, the desire for a 24-hour service was the joint-least-popular reason, with only 12% saying this was important to them.

  1. I wanted to compare what an online broker offered me with deals I could find myself (22%)
  2. I thought I’d have a better chance of my mortgage application being accepted (20%)
  3. I like trying new technologies (19%)
  4. I thought it was less likely I’d be pressured into applying (18%)
  5. I would prefer to use a website/online chat than have a phone/face-to-face conversation (17%)
  6. I thought it would be the quickest way of applying for a mortgage (17%)
  7. I thought it would be cheaper than using a human mortgage broker (16%)
  8. I saw an advert and decided to try it (16%)
  9. I didn’t feel confident researching/applying for mortgages on my own (15%)
  10. I wanted a 24-hour service (12%)
  11. I thought it would be more trustworthy than a human mortgage broker (12%)
  12. I thought it would have access to more deals than a human mortgage broker (12%)

Find out more: how to choose a mortgage broker

Are online mortgage brokers becoming more popular?

Although only a small number of people in our survey had used an online broker, 34% of the people who hadn’t done so said they’d consider it next time. One in four (24%) said they wouldn’t, and 31% were unsure.

Perhaps unsurprisingly, younger borrowers were most open to the idea of an online broker, with 68% of those aged 18-24 saying they’d give one a try compared with just 35% of 60-69 year olds.

Speed was by far the biggest factor in people considering online brokers in the future, with 58% saying they thought it could be the quickest way of applying for a mortgage.

One in three (34%) said they’d consider it as they like using new technologies, while 32% thought it would be cheaper than using a traditional broker.

Of those who would not consider using an online mortgage broker, by far the most popular reason was that they simply preferred dealing with a human being (72%).

Find out more: online mortgage brokers


What are the pros and cons of using an online mortgage broker?

There are pros and cons to using a robo adviser as opposed to a human broker:

Pros of online mortgage brokers

  • Flexibility and speed: As you don’t need a face-to-face meeting or phone call with a mortgage broker, you can find a deal at any time of day, from wherever you are. The technology should also allow you to see your mortgage options more quickly than a manual search.
  • Less paperwork: Papers are replaced with online forms, and even the documents you’ll need to supply to verify your identity and finances can often be scanned and sent over. The chance of you or your adviser forgetting a section of a form is eradicated with automated forms.
  • Fees: In most cases, you won’t need to pay for the advice you receive from online brokers.

Cons of online mortgage brokers

  • Less human judgement: Automated services can’t always account for more complicated circumstances and may be best used in simple cases. The cheapest deals might not always be available to you.
  • Less help in the early stages: A good mortgage broker will give you advice on saving and schemes before you’re ready to apply, which a robot simply can’t do to such a personalised level.

Whether an online broker is the right option for you will very much depend on your circumstances – for example, if you’re remortgaging it could be a very straightforward process but if you’re buying your first home or are self-employed you may want a bit more personal interaction.

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