Being able to take out a mortgage online is fairly recent. And really, we did not find a bank that fully offered all the services of real online credit, namely:
- online mortgage questionnaire
- Principle immediate response
- proposed rate adapted to each file
- Electronic document management
- electronic signature of the contract the mortgage
- monitoring the progress of the file online (in particular the release of funds)
Nevertheless, more and more complete systems are offered in particular for online bank mortgage loans. In the Mortgage category of our comparator, there are cheaper offers for mortgage online. But not accessible to all.
Online mortgage: how it works
It is mainly online banks that offer a mortgage online. Through this offer, it should be understood that they offer the possibility of entering a mortgage request on the internet. The questionnaire generally consists of:
- Description of the property (new or old, work or not, main residence – secondary, land, etc.)
- Identity of borrowers
- Income and expenses
- Job, bank, family situation
- Financing chosen (amount, duration, contribution, fixed / variable rate)
After this stage, it is usually an advisor who will call the client to make a proposal. It is also on this principle that our credit comparator for online mortgage works.
Indeed, it is not necessarily the decision whether or not to lend money that is difficult to take online at this stage. The most complicated of being able to make the best possible rate proposal directly online. There are factors which are difficult to put in the form of an algorithm.
Best online home loan rate
To be able to offer a tailor-made online mortgage rate (mainly a fixed teg rate fixed by article L314-1 of the consumer code), the bank generally takes into account:
- refinancing rate (the rate at which the bank borrows money itself on the markets)
- cost of risk (borrower’s default risk)
- its operating cost (agencies, employees, etc.)
- the value and location of the property
- the duration of the loan (which influences the customer rate the most)
- advancement of the bank’s business objectives
- regional competition
These are the main criteria for making a proposal. However as much in the field of consumer credit, most of these criteria can be determined fairly mathematically as much in mortgage, it is more complicated. In particular for the advancement of the bank’s objectives and the level of regional competition.
This is the reason why the functioning of an online mortgage is to collect all the data of the client and the project then to make a precise proposal within 24 hours following the entry. It is possible to give a first answer in principle online, or even to benefit from a rate range. However, the final proposal is generally made a posteriori by telephone.
Can you get a better rate with online mortgage?
It should already be noted that almost no traditional bank offers a mortgage online. They generally offer a simulator which gives the illusion but it is only an online credit simulator. Then, there is no other choice than to make an appointment with an adviser.
The online mortgage market is therefore mainly that of online banks. However, the latter mechanically have several advantages which should enable them to offer the cheapest rate. They are all subsidiaries of large “traditional” banks and thus benefit from lower-cost liquidity. On the other hand, having no branch networks and fewer staff, their operating costs are much lower.
Conversely, they do not have developed knowledge of local markets. Their policy in terms of home loan rates has therefore been to put the package on certain types of file. And if the customers fall in this case, so much the better.
How do you know if you are eligible for promotional rates from online banks? From all the offers we see going on, we can say that you generally have to be a young buyer (28-40 years old) with good resources (mini $ 30,000 / year / person and rather $ 45,000 in the Paris region) and if possible a contribution (generally minimum $ 20,000).
To get the best mortgage rate online, your best bet is to shop around. As with local “classic” mortgage brokers. It is on this basis that we built our online mortgage loan comparator. By filing a file, clients not only have access to the rates of the best online banks but also to those offered by the best local brokers. In fact, we have surrounded ourselves with the best brokers present throughout the territory. We are thus able to make a tailor-made proposal for each file.
Best Online Home Loan System
A few weeks ago, a bank just took a clear lead over all of its competitors. This is the bank mortgage. Indeed, they offer a system of simulation, of filing of file, of electronic management of documents, an electronic signature. In short, they pushed the dematerialized side very far.
To support this launch, bank also offered a very low online mortgage rate at 1.50% fixed rate over 15 years, insurance and guarantees included. But as usual with online banks, there are specific conditions to benefit from it. All that’s left is to get started to find out.