Nano promises faster mobile home loans, with payment features on top
Borrowers will be able to tap their phone and buy a coffee – via their home loan.
Faster home loan applications has been the promise of new digital lenders in the last few years. The big banks are slow and applications take weeks to process, slowing down one of the most crucial and time sensitive steps in the home buying process.
This has become an even bigger challenge during COVID-19, with staff at many lenders working from home.
New fintech lender Nano (formerly Verteva) is the latest challenger planning to speed up this process. Its product is a home loan application offered via smartphone that can process a home loan entirely digitally.
"We take the property details, we do a property valuation, we compare their existing loan, we pull in credit bureau information, repayment history, we pull financial data to calculate serviceability," Nano co-founder Chris Lumby told Finder.
Nano has just processed its first loan entirely by mobile using its platform. The lender is planning to launch home loans for refinancers to the public early next year.
Australia now has a small but healthy ecosystem of entirely digital lenders and challenger banks. This includes established online lenders like UBank and loans.com.au, Tic:Toc, which promises fast online applications, and Athena, a company that emphasises speed and low rates for all borrowers.
Then there's 86400, which just announced a partnership with Mortgage Choice to speed up the lending process. It's promising unconditional home loan approval within two hours, with help from a mortgage broker.
Where does Nano fit in? How will its mortgages differ from the competition?
"People are now looking at almost all aspects of their lives and saying I can shop or be serviced online across all aspects of my life in a matter of minutes," said Nano co-founder Andrew Walker. "Why is it when I look at refinancing my mortgage or taking out a new mortgage it happens in a matter of weeks or months?"
Nano won't put a hard figure on the time it takes to get a home loan via their mobile app at this stage. But they're confident it's fast.
Chris Lumby told Finder "The time it takes to get a bus or order a pizza" is the kind of time frame they are looking at. Of course, the home loan process is a complex one and looks different for every buyer and refinancer.
The biggest challenge for Nano has been joining all the data points together in a way that works for customers in different situations.
"Modern technology and data stacks are relatively easy these days. It's the smarts behind it to allow a customer to go straight through the journey" that represented the bigger challenge, Lumby told Finder.
If Nano can deliver home loans in the time frame it claims, it will have one of the faster loan approval processes on the market.
Spending and saving
Nano hopes to stand out from the high-tech home loan crowd by offering a home loan that is useful for borrowers even after settlement.
Nano home loans will come with a redraw facility that allows borrowers to save extra cash and spend it as they need. Customers will get a Visa card and be able to use online payment technology to make instant payments.
"We're determined to help someone manage their entire financial life through one simple product. And that's our home loan," Lumby told Finder. "You can borrow. You can also purchase, pay and tuck money away all in the one account that's fee-free and attached to the home loan."
Nano borrowers will be able to use the loan's redraw facility and a Visa card to get more value from their home loan. Nano will support Google Pay, Apply Bay and instant bank transfers.
A borrower with money in their Nano redraw account will be able to tap their phone to buy a coffee using their home loan.
Most fintech lenders focus on the fast application or a razor-sharp rate. But once you have the home loan and you've moved in, your only interaction with the lender is paying the debt off.
Some fintech lenders don't even have an app, just an online application tool. Others have market-leading rates but don't offer the flexibility of an offset account or payment integration.
While Nano's home loans will have a redraw facility (you need to be a registered Authorised Deposit-Taking Institution to offer a genuine offset account), Nano says the loan's redraw facility will function like an offset account by letting you save extra cash and offset your interest charges.
No fees and equal rates for new and existing customers
Nano also wants to keep things simple, with one rate for new and existing customers (rather than cutting rates for new customers only) and minimal fees.
It's a very beneficial guarantee for borrowers, and one that few lenders offer at the moment. Athena Home Loans, another neo-bank with a fast online home loan, is the only other lender consistently offering this guarantee.
Nano has yet to announce what its interest rates will be but Lumby told Finder that rates will be "fee-free and sharp".
The company will offer refinance loans with variable interest rates with options for owner occupiers and investors. Loans for purchasers will come later. Nano is due to launch early in 2021.