The average Brit will consult a broker when getting a mortgage on a property. However, what they won’t know is that the average mortgage broker will look at fewer than ten percent of the mortgages available and take two to three weeks just to process the application. As such, many people end up with the wrong mortgage for them – what is termed a ‘mortgage mismatch’ – and could typically lose £4,000 per year as a result.
Enter Habito, the world’s first digital mortgage broker: Habito is the brainchild of founder and CEO Daniel Hegarty, who personally struggled with the mortgage process to the point where he almost lost his home. Together with a group of designers, engineers, mathematicians and mortgage experts, they built Habito. Their aim is to transform the mortgage market and truly believe Habito is the correct tool for change. As Hegarty puts it: “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 ten, twenty or even thirty 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.”
Habito is a timely answer to the 7.6 million active mortgages in Britain, where 1.4 million mortgage holders don’t know if their mortgage is fixed or variable rate, and the 1.3 million who do not know how long their mortgage term is. All the confusion and stress is dealt with quickly by Habito.
How Habito works in a quick, three-step process:
- Use the mortgage calculator to get an idea of how much can be borrowed or saved each month. The mortgage calculator does not include any charges or credit checks.
- Sign-up online in record time without the need for paperwork, long queues or waiting on hold. No initial appointment required and you can apply 24/7, in minutes.
- Habito’s algorithm accesses and analyses every mortgage on the market from over 100 lenders in a matter of seconds, to find exactly the right one for you. Then, the company’s experts personally look after the entire mortgage application from start to finish.
Throughout the process of finding the correct lender for your mortgage, the software is free to use and in general, there is no incentive for Habito to favor one lender over another. The only thing that matters is finding the best deal for customers. This is because as a digital mortgage broker, Habito is paid by all the lenders to process mortgage applications. The fee is a fraction of the percentage value of a full mortgage. Since Habito is a proponent of transparent and fair business dealings, they vow to always tell you when and what they are paid throughout your entire mortgage application.
In an effort to build long-term relationships with its customers, Habito continues to closely monitor the market after they’ve found a mortgage for an individual or family. This is to ensure that if a better deal exists with one of the lenders, Habito will inform the client and help them switch smoothly from one mortgage to another. According to Hegarty, all in all, Habito is set on a very aggressive roadmap of releasing features over the next few months. These features should make the application and mortgage approval process even easier.
The British mortgage broking market sits at a head-turning £95 billion, according to Bank of England statistics. However, as explained earlier, traditional mortgage brokering may easily lead to a ‘mortgage mismatch’ and result in customers losing money instead of saving it. Habito hopes to be a disruptive force in the market to the tune of saving consumers upwards of £29 billion a year. As the first digital mortgage broker in what may probably be a string of similar businesses, Habito has both the opportunity to stake a very firm position in the mortgage brokering market, and a chance to create a roadmap which other companies can follow.
The company is already showing early success with half a billion pounds in applications since April 2016. Habito has also managed to raise £1.55 million in seed funding, led by Mosaic Ventures and some participation from key angel investors such as Taavet Hinrikus of Transferwise, Samir Desai the CEO of Funding Circle, Tom Stafford and Paul Forster.