Online mortgage approvals garner support
Westpac Bank is reaping the rewards of extending its home-loan approval process to the internet, but the real acid test remains.
Last October, it became the first big Australian lender to offer prospective buyers the ability to get mortgages approved online, through its HomeClub website.
By December, more than 12,000 members had signed up to the HomeClub service, and 11 per cent of all home loan applications were made via the website.
HomeClub was launched earlier in 2012 as a central hub for house-hunting Kiwis, in an exclusive partnership deal with Trade Me.
The site is cross-linked with the online auctioneer's extensive property listings, and offers users several free QV valuations, street views, mortgage servicing calculators, and, most recently, pre- approval for loans.
Westpac head of retail banking Ian Blair said customers could get loan approval "sitting in your pyjamas at the kitchen table".
While they eventually have to visit a branch to sign documents and confirm income details, the conditional approval provided certainty "so you can wander around with a hunting licence".
State-owned Kiwibank is the only other lender to pre-approve mortgages online, a service it has offered for three years.
The real test of HomeClub's success will be whether it can help Westpac grab a bigger bite of the mortgage market.
The bank had $35.9 billion in home loans on its books in September 2012, before online approvals went live, for a market share of just over 20 per cent.
But Westpac may also measure the success of its investment by the value added for customers.
"I don't think [HomeClub] is driving growth, per se," Blair said.
"What it's providing is improved utility and functionality.
"When it [online approvals] will really take off is when you can include the advice side with the processing."