Online mortgages on the verge of take-off

And with almost 80 per cent of respondents to Direct Line’s first Online Mortgage Index anticipating the online mortgages will become more popular, the direct mortgage lender believes the online mortgage market is set to take off.

“We believe that the online mortgage market is ready for strong growth in a similar way to the increase in recent times of grocery, music and book shopping online.

“Many people realise that the best way to achieve value for money is to go online, as they do currently when taking out a personal loan. That same philosophy will increasingly apply to buying your mortgage,” said David Dyer, Commercial Director fro Direct Line Mortgages.

The Direct Line Online Mortgage Index comes as Direct Line launches its first online only mortgage.

The two-year tracker mortgage is set at the competitive rate of 4.19 per cent, which reverts to a long term tracker rate of 6 per cent.

Dyer said: “Some providers offer their existing customers a poorer deal as they bid to attract new borrowers with headline rates. We will be providing money saving deals for all customers.”

Currently people looking for a mortgage still value personal contact to help them with the process, with 35 per cent making mortgage brokers their first port of call and 28 per cent visiting their bank.

Once that initial contact has been made however, more than half of customers will research the best deals online.

Of the 26 per cent who say they are likely to apply for a mortgage online, they cite their top reasons as easy comparison with other lenders, convenience and expectation of a better deal.

Some 80 per cent believe online mortgages will become more popular in the future and if a lower mortgage rate was available online, 46 per cent say they would be likely to take out an internet mortgage.

Dyer said: “Our Online Mortgage Index proves customers are looking to the internet to drive better mortgage prices.

“There’s no doubt that this is the area of the mortgage market which has yet to meet its full potential – and Direct Line intends to be at the forefront of offering customers the best possible deal coupled with the highest levels of service.”

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