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Online only mortgages set to take off

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The online mortgage market is set to take off, as more than 80% of people anticipate that online mortgages will become more popular, Direct Line has claimed.

New research from the direct mortgage lender has revealed that nearly twice as many people would be likely to apply for a mortgage online if they could be sure they were getting the cheapest deal available.

The Direct Line Online Mortgage Index showed that of people currently looking for a mortgage, 35% still valued personal contact to help them with the process, with 35% making mortgage brokers their first port of call and another 28% visiting their local bank.

Yet once that initial contact had been made, some 52% researched the best deals online. Another 26% said they were likely to apply for a mortgage online, and 86% of those said they would do this as they could easily compare deals with other lenders. Additionally, of those willing to apply online, 78% said they would do so because it was convenient.

Some 46% also said they would be likely to take out an internet mortgage if it was cheaper, demonstrating that the online mortgage market is ripe for growth.

On the back of this research, Direct Line has launched its first online only mortgage. The Direct Line online only mortgage is a two year tracker mortgage at the competitive rate of 4.19%, which reverts to a long term tracker rate of 6%.

David Dyer, commercial director for Direct Line Mortgages said: “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,” he explained.

He added that it would be offering money saving deals to all of its customers. Direct Line’s Online Only Mortgage is available for both new and existing customers and for new purchasers and those looking to re-mortgage.

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