Neobank to offer digital mortgages through brokers

By Gerv Tacadena

86 400 wants to make the home-loan application seamless, reducing the paperwork needed for approval

Neobank 86 400 has announced a digital home-loan offering available through brokers in a bid to provide an alternative for homebuyers in Australia.

With the announcement, 86 400 becomes the first home-loan provider in the country to offer digital mortgages through brokers.

86 400's home-loan offering will be available for purchasers, refinancers, owner-occupiers, and investors as a fully-featured loan with fixed or variable-rate options. Redraw facilities will be available to potential clients.

The variable-rate loan will have a multiple offset-account feature. As of posting time, rates for 86 400's home loans start at 2.88% per annum for two- and three-year owner-occupier fixed-rate loans on a principal-and-interest-rate payment basis.

The announcement came nine weeks ahead of its public launch. The bank was granted a full authorised deposit-taking institution (ADI) license by the Australian Prudential Regulation Authority in July.

Also read: Aussie turn to digital banking, ditching bank branches

How the process will look like

86 400 is planning to streamline the application process and focus on the key consumer and broker pain points, particularly the amount of paperwork.

To achieve less paperwork, the bank will employ an electronic statement capture feature for income and expenses. The bank will also utilise a simplified identity verification using mobile phones. Electronic signatures will also be used in online portals.

"Our smart technology works on the brokers’ behalf, to make their life simpler every step of the way. We know mortgage brokers drive competition and choice for consumers, which is why we have focused on erasing their pain points so they can deliver the best value to customers. This is the first offering in recent years that offers real, tangible benefits to both brokers and homebuyers," said Melissa Christy, home loan lead at 86 400.

In a previous interview with Your Mortgage, Christy said the bank chose to offer loans through brokers because of the competition the broker channel provides in the market.

"They give comfort to home-loan customers who still like to meet someone face to face to explore the right lenders for them and their circumstances for such an important purchasing decision," she said. "Brokers currently waste too much time trawling through paperwork. We have smart technology to do that for them, giving them more time to deliver real value to their clients and allowing them to prioritise the stuff that really matters."

More Mortgage News