Interview with Stefanie Fritze of Homegate AG about Swiss online mortgages and, specifically, the online mortgages offered by homegate.ch.
Stefanie Fritze is chief marketing officer at Homegate AG.
What is the difference between an online mortgage and a conventional mortgage?
Stefanie Fritze: Online mortgages are typically offered with lower interest rates than conventional mortgages. Applications can be made and approved from the comfort of home at any time (24/7). The homegate.ch online mortgage lets homeowners manage their mortgage via an online portal.
Extending mortgage terms, switching to other mortgage products, increasing mortgages and amortizing existing mortgages can all be done online. Unlike the conventional, branch office model, online mortgages do not include in-person consultation or recommendations. The online mortgage service from homegate.ch includes a hotline through which customers can get consultation over the telephone.
Can I refinance my mortgage online as well?
Yes. Refinancing – including the refinancing of mortgage tranches which expire at different times – can be managed online. This applies to both primary residences and personal holiday homes in Switzerland.
Which mortgage types can be obtained online?
The most widely-used mortgage types can all be applied for and approved online via homegate.ch. Available mortgages include fixed rate mortgages with terms of between 2 and 10 years, adjustable rate mortgages without fixed terms and LIBOR mortgages (based on the 3-month LIBOR) with 2-year terms.
Which mortgage types are most popular with online customers?
Currently, the online demand is strongest for fixed rate mortgages used for refinancing. Demand is strong across the full spectrum of mortgage terms.
What is the most important advantage of online mortgages?
Online mortgage offers often have lower interest rates than mortgages offers at branch offices. Another advantage is that homegate.ch online mortgages can be applied for at any time of the day or week (24/7) from home or on the go.
What kind of homeowner is an online mortgage best suited to?
In principle, all mortgagors who are looking to replace an existing mortgage or refinance a mortgage for the first time. The mortgagor must have access to the Internet and they must be prepared to forgo personal mortgage consultation in person.
Online mortgages from homegate.ch can be applied for by all individuals residing in Switzerland, including employees and self-employed individuals. Other entities, such as corporations, are not eligible.
How reliable is the online channel?
Very reliable. In order to provide maximum security, sensitive personal data is protected from fraudulent access by a multiple-stage login procedure.
Where does Switzerland stand in the field of online mortgages?
The share of mortgages in Switzerland which are closed online is still small in relation to the overall mortgage market. However, there has been steady growth and the share of mortgages applied for online has increased notably in recent years. However, it is important to note that not all products marketed as online mortgages provide equal levels of service.
What challenges has the low-interest environment brought with it?
The low effective interest rates have led to a strong growth in demand for residential property in recent years. In order to ensure that mortgagors are able to service their mortgages if and when interest rates increase, banks use an imputed interest rate of 5% when calculating the mortgage servicing capacity of applicants.
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