Speedy lender could shake up the mortgage market

After more than two years of research and development, an Adelaide fintech says it can approve a home loan online in just 22 minutes.

Tic:Toc Home Loans launched this week, with a purely online business model which it says lowers overheads and fees, while speeding up the approval process.

Founder and CEO Anthony Baum says that while other lenders offer online application options, ultimately the application moves offline for the approval process.

“So while their application may begin online, it ends in the exact same way every other traditional home loan process does,” he told Business Insider.

So how does Tic:Toc knock down the typically tedious task of applying for a home loan to a 22 minute online process?

Mostly by utilising online verification processes. Firstly, the property needs to be located in a capital city or major regional area. At this stage Tasmania and the Northern Territory are excluded, but the team say they are working on it. You’ll need to verify your identity with a Medicare card, driver’s licence and/or passport. You’ll need to have at least 20% of the deposit plus fees and stamp duty saved, and you’ll need to demonstrate a regular income to cover the minimum loan amount. Tick all those boxes and you could be instantly approved for a home loan.

The great part about a purely online system is that it eliminates many of the fees related to a person processing your application. So say goodbye to valuation fees, establishment or application fees, settlement fees, service fees and redraw fees.

Tic:Toc have teamed up with Bendigo and Adelaide Bank to underwrite variable and fixed rate loans, offering a comparison rate of 3.69%, beating all the rates listed on Canstar’s Home Loan comparison service. While the rate is great, this kind of loan won’t be for everyone. So do all the necessary research or talk to your financial adviser before applying.

How likely is it to shake up Australia’s ever-competitive home lending market? The big four are always keen to slash costs from their bottom line, so no doubt they’ll be keen to investigate Tic:Toc’s business model and find ways to implement it themselves. Perhaps first as a no frills, entry level option to get first home buyers on the property ladder.

While they’ll be wary of approving a loan with so few details, as the technology progresses and the banks put their own development teams on the model, they’ll be able to extract more information from customers before approving loans. The major downside will be job losses after the Commonwealth Bank slashed 150 jobs in Brisbane in June, ANZ cut 200 jobs in May and NAB shed 100 staff in March.

Rod Bristow
Managing Director and CEO

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