Mortgage Broker
A mortgage specialist speaks with clients at a JPMorgan Chase foreclosure consultation event in New York, in this March 31, 2011 file photo. Reuters/Shannon Stapleton

Traditional mortgage brokers could now be ditched by Wespac Banking customers following the lender’s investment of $16.5 million in fintech firm uno. By allowing mortgage customers to broker their own home loan, the bank would get a cut of the broker fees it pays yearly amounting to $2 billion.

The end-to-end digital process of uno is also being offered by Commonwealth Bank of Australia (CBA), National Australia Bank and 14 other lenders, part of the 400 mortgage products offered by uno. But ANZ Banking Group is excluded due to its in-house policy to sight a loan applicant early in the process, reports Australian Financial Review.

uno would compete against AFG and Mortgage Choice and Aussie Home Loans – ASX-listed mortgage brokers which facilitate more than 50 percent of all mortgages written in Australia. Since banks earn more on loans sold through their branch networks, uno would also compete against the banks.

Since its launch in June, uno now has more than 1,000 active users and the dollar value of mortgages compared through the platform exceeds $400 million, while $40 million worth of mortgages are in various stages of progress in the platform. It plans to further expand by partnering with other online platforms. The Surry Hills-based start-up allows users to see and compare all information about a loan that used to be accessible only to traditional brokers.

The platform is part of the growing global trend for customers to tap technology, assisted by 35 uno employees who are paid salaries and not commissions. The staff provides support and advice often through internet chat, says Vincent Turner, founder of the Sydney start-up. In contrast, many traditional brokers work face-to-face and piles of paper.

Meanwhile, Sydney Morning Herald reports that Westpac announced on Tuesday it would cut its mortgage discounts by 0.2 percentage points for different loan packages for owner-occupiers and investors. The lender would also stop the $1,250 rebate it offers customers who refinance.

CBA also cut its discounts by 0.15 percentage points in August which it attributes to higher funding costs. Westpac, like CBA, is also reducing its five-year fixed rates, but the changes would not affect current borrowers. It would be new customers who would be charged higher interest rates.

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