Mortgages / re-mortgages - help to buy equity loans


(Chris Deeming) #1

What is Monzo’s current position / ideas regarding providing finance/re-financing mortgages?

I saw an archived card on Trello but not really seen any comments about why it was dropped from initially short term targets to being totally abandoned.

I assume there’s more of an inclination to provide mortgages via the marketplace concept.

Though I do have to wonder if Monzo offering mortgages eventually to Monzo customers directly actually makes the most sense.

One area of the market Monzo could target which could be lucrative is targeting mortgage holders who mortgaged through the Help to Buy equity loan scheme.

This year marks the first year that the first users of this scheme are beginning to pay interest on these equity loans.

The options in terms of repaying the equity loan is to either “staircase” whereby you can increase your equity share in the property or remortgage if you have enough equity with a view to buying out the equity share from the government in its entirety. Of course the other option is to pay interest on the equity loan forever (or until the property is sold).

Obviously the last option here makes very little sense so there will be a market of (currently) 150,000 mortgages in this scheme at some point looking at remortgaging as an option to pay off these loans and save a bucket on interest.

Arguably, an incredibly small market, but on the other hand, a niche market such as that could be ideal for a fledgling bank such as Monzo’s initial foray into offering mortgages.