Your First Mortgage Could Come From Revolut
Your First Mortgage Could Come From Revolut
Text: Izzy Copestake
The company says that by the end of the year, customers will be able to get a mortgage directly through the app.
Digital bank Revolut is pushing ahead with plans to offer mortgages to customers by the end of the year. The company intends to launch Irish home loans directly through its app, supported by a phone-based service to assist with the more complex parts of the process. While the initial focus is on direct lending, Revolut may explore working with brokers in the future. This decision to bypass brokers, at least initially, sets Revolut apart from many competitors, given that brokers currently handle around 47% of all home loan volumes in Ireland.
Revolut has three million users in Ireland. This gives the digital bank a major opportunity to promote its upcoming mortgage offering and challenge the dominance of the three main Irish banks, (AIB, Avant Money and Bank of Ireland) which were responsible for 92% of the €12.6 billion in mortgages issued last year.
In a statement to The Irish Times, Joe Heneghan, chief executive of Revolut Europe, confirmed that the company began market testing in Lithuania earlier this month and has already issued some mortgages there.
The move into mortgage lending follows a strong financial performance by the digital bank. Revolut recently reported a 129% surge in annual profit, reaching £790 million (€922 million). According to its annual report released yesterday, the growth was driven by card transaction fees and interest earned on surplus customer deposits held with central banks.
Revolut’s lending potential is reinforced by the £22.3 billion in global customer deposits it held at the end of last year. Yet, its loan book remains relatively small at under £980 million, most of which consists of personal loans.
“We think the mortgage process that customers go through at the moment is unwieldy and can be made a lot slicker,” said Mr Heneghan. He added that Revolut plans to compete on price, though no specific rates have been announced yet.
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