Homegate AG, in collaboration with the Zürcher Kantonalbank, launched one of the first Swiss online mortgage offers in 2012. What was the logic behind this move?
Since it was founded in 2001, homegate.ch has been devoted to digitalizing the real estate business. That was accomplished with ad posting, and the power to search and find relevant properties. With our mortgage offer we’re working to bring about sustainable change in the way home purchases are financed. That ties in with our goal of broadening our range of property-related services.
Has Homegate AG’s online mortgage offer been a success?
In spite of the large number of online mortgage offers available today, mortgage contracts closed online make up a negligible share of the home loans market. But we see a growing trend, particularly with the homegate.ch online mortgage offer. Looking at the steady increase in successful applications for our online home loan, we believe this model has stood the test.
Mortgage comparisons show that Homegate’s online mortgage offer is among the most affordable in Switzerland. Is an offer like that even financially viable?
There’s one major factor which plays a big part in delivering those low rates: The uptake in mortgage applications completed online has made it possible for Zürcher Kantonalbank to cut down on administrative staff in a big way.
Online mortgages are currently trending in Switzerland. Many banks are launching their own e-banking services. What sets the Homegate offer apart from other online mortgages?
homegate.ch has the widest range because as well as offering mortgage refinancing, we also provide first-time mortgages and home purchase financing. Plus, our mortgage offer is available country-wide. It’s the only online mortgage currently available in French-speaking Switzerland. Another benefit is that, even after you sign up for our online mortgage, you can still adjust individual aspects of your mortgage, and even apply for an increase in the home loan amount. And you can do all of that online, with decisions from Zürcher Kantonalbank made in real-time.
How would you describe Homegate’s collaboration with the Zürcher Kantonalbank?
This joint venture makes optimal use of synergies. homegate.ch provides the portal and functions as a contact point for homebuyers looking for a home loan. Zürcher Kantonalbank delivers as the contract and financing partner, checking eligibility and making decisions online within seconds.
What type of mortgage applicant would most benefit from an online mortgage? Which customers would not?
In principle, all Swiss adults can apply for the homegate.ch online mortgage. Even a first-time mortgage applicant can successfully obtain a home loan from us using the information provided on our online mortgage portal and the tips in our mortgage guide. However, online mortgages are best suited to people who do not need a lot of consultation.
What criteria must be met for a successful mortgage origination?
Anyone who resides in Switzerland can obtain a home loan from homegate.ch, though we only finance existing homes in Switzerland. The financing of up to 1.2 million francs is subject to a maximum loan-to-value ratio of 80 percent, the standard for mortgages. That means the bank will lend up to a maximum of 80 percent of a property’s value.
Looking at the big picture, the majority of Swiss mortgage applications are still made offline at a bank branch office. What are the main obstacles standing in the way of online mortgages? What action is Homegate taking to overcome these?
The biggest obstacle is the fact that the consultation aspect largely disappears when mortgages are applied for online. That’s the reason why we regularly add valuable home-finance tips to our mortgage guide.
Where do you envision your online mortgage five years from now?
With our online mortgage we aim to become the leading provider of online mortgages and the first port of call for information relating to home financing. We picture ourselves, along with other online mortgage providers, servicing 10 percent of Swiss mortgages.
Your general assessment of digitalization in banking: What would you consider to be the hottest fintech trends?
I find the phenomenal growth in the number of online mortgage offers available in Switzerland exciting. In Germany, for example, there isn’t one online mortgage that comes with real-time decisions when you apply. In Switzerland we can already count five. I look forward to the possibility of sorting out everything banking-related from home in the near future. But I worry that, over the coming years, technical developments will cause people to become lazy, under the guise of making things easier.