Monzo Mortgages?

Continuing the discussion from Now in Labs: See your mortgage in Monzo :house::

Hi Harry,

I was wondering if Monzo was planning to offer mortgages at some point in the future? And if so, whether that’s in short or longer term plans?

Monzo has made every other area of banking SO much easier, and better, but without mortgages as part of the product we still have to rely on (and potentially keep an account, and track record of income etc, with) one of the high street banks (as an example, getting your salary paid into your high street bank account before transferring it straight to Monzo so you maintain your track record while benefiting from Monzo for your everyday banking).

Adding mortgages to Monzo would basically complete the set of product offerings that the traditional banks provide, and would mean we can finally break free of them, hopefully for good lol.

Thank you,



Monzo don’t have anywhere near the reserves needed to offer mortgages.

But I don’t really care if they do or who does. It’s something I deal with every 2/5 years, I don’t care about the app or being full Monzo with everything. Rate is far far more important. .1% makes a big difference on such big sums.


We have two of @davidwalton? :face_with_raised_eyebrow:


Ahhhh yes, we do indeed lol. It’s a bit confusing (even for me), especially when we comment on the same thread lol


I’ve just changed my display name. I’d been meaning to do it for a while.


Let’s hope @MrsW doesn’t read this thread…


1% does indeed make a huge difference. And, I’d agree that Monzo probably couldn’t have offered mortgages in the past due to lack of reserves (and while interest rates were below 1% it wouldn’t have made much sense to start a mortgage business), but with Monzo now providing in-house savings accounts (offering some of the best interest rates available on instant access accounts), loans of up to £25K, and Flex, those reserves should be increasing all the time. Plus, mortgages are great investments for a bank (or their investors) to make, offering a 2, 3 or 5 years investment with an agreed rate of return (I saw some lenders quoting up to 8% recently). Now would also be the perfect time to start offering them, while interest rates are at their current level they would get a much better return on their money. And because ppl usually switch their mortgage provider at the end of their fixed deal (or at least renew with the same bank), they aren’t waiting 25+ years to get their money back. While they would obviously need a chunk of capital to get any mortgage offering started, and there’s always a percentage that will default, it being a secured loan means the losses from defaults are much less than from defaults in their unsecured loan business.

I guess I’m saying that if I was on the board of Monzo, I’d be suggesting and/voting for us to expand into the mortgage market in the very near future to take advantage of current rates.

Plus, being the Monzo that we know and love, they’d more than likely do a really good job and mortgaging/remortgaging with them would be attractive in terms of rates and product quality.

Is that my cue to say something outrageous? :joy::rofl::joy:

Let’s just hope the other DW’s middle name isn’t Michael too :man_facepalming:t3: lol

It’s a bit of a leap to go from £25k to hundreds of thousands, if not millions!

Out of curiosity do you work in this sector and what you’re saying backed by experience/knowledge or is this just your personal opinion?

Either is fine of course, but some of the phrases you use indicate you possibly have experience.

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Hi Ordog,

You’re right, £25K to the average UK mortgage (~£288k) is a big jump in terms of loan amount (although they seem to be increasing the size of the loans they offer quite quickly), but with their loans generating interest of up to 39% (I believe that’s their max APR on loans up to £10K, although they say the representative APR is 27.9%. I can’t remember exactly what the £10 to 25K APR is, but it’s up to 29%, roughly, I think (with the representative APR advertised at 14.8%)), the profit soon mounts up. Plus, as I said in an earlier reply, the security of a mortgage (as it’s secured against the house), and likelihood of you going to get every penny you’re owed is much higher, so you lose less profit than with loans due to having to write off defaults

Also, starting to offer mortgages doesn’t mean you have to immediately loan out £200 million pounds worth of mortgages in the first few days. You could start off small (like most of Monzo’s feature drops tend to do) and only approve a few at a time (generally the mortgage approvals process is sufficiently opaque that any customer that was rejected wouldn’t have clue that they were turned down because Monzo had already maxed out their lending quota for that week), and building it up slowly.

It also gives the bank a longer term, more secure income stream. A normal loan offers Monzo 5 years of their money generating income, but there’s the potential for that loan to be repaid and then just sits in Monzo’s account waiting to be loaned out to a new customer, and not making any money for Monzo during that waiting time. Whereas with a mortgage you’re guaranteed to have that money generating income for 25 years (or paid back early but for an extra fee).

I believe that mortgages are one of the most profitable areas at high street banks so it would be good for Monzo to get in on the act…when the time is right for them…and, hopefully, in the process, offer us a new mortgage lender that will approach it differently to the high street banks and deliver a better product for Monzo and its customers.

Anyway, I just thought I’d pose the question to the borrowing team as I’m currently shopping around for a new mortgage so it was on my mind.

P s…

No lol, I don’t work in the banking industry. Having said that, I do spend about I half my time trading on the UK and US stock markets. I’m not sure whether that makes me an amateur member of the industry, or maybe even semi-pro as I’m making money from it :joy::rofl::joy: So, I guess there’s some experience/knowledge in there along with some personal opinion too…which is a fairly unhelpful answer :man_facepalming:t3: lol.

I dont think it’s quite as simple as that otherwise on their drive for profit it would be a no brainer to do this instead of “messing” with the new cashback scheme.

Never say never. One day it may come :crossed_fingers: but i cant see it being anytime soon.

As a mainstream borrower, if Monzo could offer top rates (ie competitive with the likes of LBG, RBS group, Nationwide, Barclays, etc.) then yes, it would be something I’d consider.

But generally speaking, I don’t really care how ‘user-friendly’ my mortgage or the application process is, my mortgage broker takes care of any friction in the application process and once it’s running it’s all good as long as the monthly payment goes out on time. All that matters to me is the rate.


Im extremely happy with Monzo and if they could add Mortgage to their system, it will be perfect.

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Yeah, I have to say I like things being together in general, and am “full Monzo”, have been for years, but when I’m remortgaging I go for the best rate (found by a broker)… And that’s pretty much it. Especially now I can easily see my mortgage balance with a high street bank in the Monzo app anyway. Even things I really hate, such as the bank forcing use of an abysmal legal company, won’t influence my decision unless I have two equal rate offerings.

Monzo are rarely market leading for rate, let’s be generous and pretend they are going to be .1% behind.

£240k mortgage over 30 years.

5% vs 5.1%

£14.71 difference per month. Doesn’t sound a huge amount.

£176.52 a year

£5.295.60 over the mortgage term. Just to have it all be with the same bank. Bonkers! Even more so when you consider you can add a mortgage elsewhere to the app anyway.


But imagine if they bundled it with a Premium upgrade on the current account, which people already pay £15/month for. They could use it as a way to get a 5 year lock-in on people (the length of the special rate).

So suddenly people are taking out the mortgate with them to get the Premium upgrade, seeing it as a bargain, effectively paying for it anyway, and staying with it for a long time. And then, when they move their mortgate to a new deal, some of them stay around because they’ve got used to having the travel insurance, or the lounge access, or…


:point_up: This. Exactly this.

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Madness to make a mortgage decision on the basis of some freebies you may or may not use over 5 years.

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No it isn’t.

If you get a .1% reduction by paying for Premium and that saves you more than £15, the other things are moot.

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