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Sunday, 23 January, 2000, 12:34 GMT
Online mortgage market takes off

Street of houses More homeowners are applying for mortgages online

One of the biggest online mortgage brokers in the US, E-Loan, opened for business in the UK on Sunday.

E-Loan joins a handful of other mortgage brokers, who now compete to sell mortgages online in the UK.

The Property Maze
On the E-Loan site, a borrower can compare, apply for and obtain a mortgage from more than 40 UK lenders. The company makes its money from the commissions lenders make to brokers.

E-Loan's UK launch comes amidsts fresh predictions of a boom in online mortgage lending.

Deutsche Bank projects a global online mortgage volume of $250bn in 2003 or almost 25% of total mortgages.

"British homebuyers are clearly confused and in many cases this probably means they are not getting value for money from their mortgage," Andrew Armishaw, head of E-Loan and formerly chief executive of First Direct said.

E-loan web page E-loan offers advice online

"If homeowners do not understand the terms and conditions of their mortgage, they have little chance of establishing whether they could save money by switching to another mortgage provider," he added.

The competition

E-Loan, founded in the US in 1996, has a 25% share of the online broking market in the US.

It is not the only company to offer mortgage advice online in the UK. Mortgage broker John Charcol switched its mortgage service online last year.

Keith Scott, chief executive of John Charcol, said that it was increasingly a "ludicrous notion that borrowers will trudge up and down the High Street for a home loan."

John Charcol expects its online business to match its High Street business within two years.

Money Supermarket, launched last year, also offers customers the chance to choose from mortgage deals online.

These companies operate in an increasingly competitive mortgage market.

The rewards are high, with the value of mortgage lending in the United Kingdom thought to have topped 100bn in 1999.

But mortgage brokers have come under fire from regulators for giving customers the wrong advice and not spelling out the penalties for early repayment of loans.

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See also:
09 Jan 99 |  Your Money
Help for home buyers
07 Dec 99 |  Business
New website promises 'best mortgage'
15 Nov 99 |  Business
Why banks love online customers
16 Sep 99 |  Your Money
Mortgage advice is 'unreliable'
25 Aug 99 |  The Company File
Net bank offers cheapest mortgage
29 Apr 99 |  Your Money
Mortgage lenders face tougher controls
15 May 98 |  Money Reports
Mortgages made simple

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