A former CBA Chief Digital Officer has brought to market a mortgage broking fintech that is looking to disrupt the nature of home loan interest rates.
True Savings, a Sydney-based start up, has released a report that suggests that Australian borrowers are overpaying by $3.6 billion on their home loan, complete with a broker channel solution that could see them save that cash in the future.
“Our mortgage broking startup is all about helping customers save money,” said Pete Steel, the former CBA exec. “As I worked at CBA, Australia’s biggest bank, I saw how much Australians were overpaying every year based on what is known as ‘loyalty tax’, or overpriced home loans.”
“One thing that big banks are not great at is making sure that their customers are saving money and getting the best interest rates.”
“As part of launching our platform to do something about it, we commissioned a report that surveyed 52,000 households, which is a huge number, and it’s recent too, so quite real.”
“The report points out how much customers are overpaying on home loans by being above market rates.”
“It’s fairly simple: it looks at those 52,000 households as segments of customers with similar characteristics about their loans, and what the average is for those segments, which it then compares to the better rates that are available.”
The results were shocking: $3.6 billion in savings due to wastage on overpriced interest. True Savings’ key proposition is helping customers to reduce that amount.
Their offering is similar to that of Effi, which links brokers to lenders beyond their panel, with a touch of Joust, the client retention and marketing platform that allows brokers to keep their clients up to date over the life of a loan.
“We do three main things; we bring a database of all products and interest rates out there, which is updated every day, to the front of the experience. We also add to that the real prices that we see customers getting.”
“That makes it easy for a customer to come on and see what they can save, which brings transparency. We call it the ‘shock and delight’ moment when customers see what they can save.”
“Most people still want to talk to a mortgage broker expert to help them succeed, so we invented a way for our experts to appear in video and on a collaborative white board on the customer’s browser to help them understand their option and give them clarity on what they should do to save money. That’s a world first.”
“Thirdly, we use data to make the process easier for customers and then keep alerting them in the future. If they fall out of the market rate and start getting overpriced again, we can make it really easy for them to save money.”