The average loan size for mortgages completed over the internet is estimated to be just below £90,000, Mortgage Solutions can reveal.
A straw poll of 10 of the mortgage industry’s leading players showed that just 937 cases had been sourced and completed through the internet with a total origination value of some £84.25m.
Figures from the Council of Mortgage Lenders put the national average loan size during Q4 1999 at £67,252, reinforcing the trend that internet applicants tend to be high earners.
The sample, which included two leading building societies, two sub-prime lenders and six of the UK’s top banks, all reported an element of success in enquiries made through the internet.
Many attributed the poor take-up of net-based applications to an ongoing need for financial advice in an increasingly competitive market.
Although the realm of online mortgage applications is still relatively young in the UK, it will continue to expand. But the present sector remains somewhat static, because the public is nervous about making big transactions online.
From the sample questioned, high street banks seemed to be more successful in encouraging customers to apply over the internet, but one society appeared to be making notable inroads.
The sub-prime market also showed success in the online market, with some £12m being originated from 72 applications.
Michael Bolton, marketing manager at Future Mortgages, said: “The internet has been over hyped, but the broker market does need to have the concept of online mortgages sold to them. Cases so far have typically been larger than average with lower loan-to-values (LTV). The average loan size is £90,000 and the average LTV has been 78%.”
Maria Davlantes, Charcolonline marketing director, said: “The research sounds reasonable. John Charcol attracts the cream of the crop and our average loan size online has been £115-120,000.”