Consumers can use the service to see if they can get a cheaper deal with Lloyds and then get an agreement in principle in minutes.
Mortgage brokers are divided on whether Lloyds Bank’s launch of a fully online remortgage service is a threat to the sector.
Consumers can use the service to see if they can get a cheaper deal with Lloyds and then get an agreement in principle in minutes.
If approved the bank indicates the amount of money it can lend and the full mortgage application can be completed online on an execution-only basis in around half an hour.
Andrew Montlake, director at Coreco in Central London, said: “It’s undoubtedly a threat to intermediaries but it’s about us as an industry making sure we promote the benefits of getting professional advice.
“It’s all very well being able to do it online but you are only getting the benefit of one particular lender’s products which doesn’t necessarily mean it’s the right product for that person.
“It’s always better to go with brokers who can access 90 different lenders rather than one.
“There will always be borrowers who don’t want to interact with brokers and would rather do it themselves and as long as it’s completely simple and easy there is a place for it.”
Richard Hanlon, principal at Mortgage Planners in Dundee, reckoned this online remortgage service will split generations.
He said: “It has to be seen as a threat but I don’t see it as an immediate threat that will rock the marketplace.
“Only the youngest technical savvy people will do it because in my experience people like advice and don’t want to make the choice themselves – people like someone to blame!”
But Jonathan Burridge, who is an independent mortgage broker based in East London, said: “It’s not a threat.It will make things easier for a percentage of the population who don’t believe they need advice.
“Some people will have their creditworthiness affected because they will apply shotgun style to different lenders, get declined and then see a mortgage broker afterwards.
“The majority of the population value advice and in the UK it’s still available independently at a reasonable price.”
Meanwhile Arthur MacIntyre, principal of Money Planning in Cambridge, remarked that Lloyds’ move won’t rock the boat because it's rates “aren’t very competitive” but wondered whether online execution-only could be a more of a threat in future.
Lloyds’ system allows applicants to upload documents electronically and self-select by mortgage type, such as a variable or fixed term. It also offers a web chat service to talk borrowers through the process.
With talk of other lenders following Lloyds, Montlake said advisers need to invest in technology to match their lender counterparts.
He added: “All lenders will be looking at their technology capabilities and it’s only a matter of time before all of them have offerings like this.
“All the main lenders will because it’s the way the world is going and that’s why brokers need to look at their own technology offerings.
“They can make it easier for the client to do business; to get information to them and to provide their details.
“Technology has a role to play but for me it’s important that people follow the high tech and high touch model – technology needs to work with the personal touch.”
