Put your mortgage out to tender

Fledgling on-line mortgage tendering service Loansurf claims to have got off to a flying start.

Executive director Dave Fermah says the service received more than $2 million in loan applications within its first two-and-a-half days.

"It’s a substantial amount. We’re tracking to do $250 million a year,’’ Fermah says.

Loansurf, which is backed by mortgage broker Property Pack, allows would-be home lenders to put their mortgages out to tender free of charge and promises to deliver offers from up to 13 lenders within 24 hours. Potential borrowers can register either directly on the internet or by phone.

Property Pack placed $500 million of residential mortgages across New Zealand last year, he says.

Loansurf’s lenders range from the major trading banks and insurance companies to niche lenders such as HSBC and Resi Homeloans.

Fermah says Loansurf, which will make its money from fees from whichever lender wins each tender, has developed a unique tendering system that it’s in the process of patenting.

Its tender system "gives borrowers the certainty that they are getting the best possible deal’’ he says. On the average $180,000 mortgage, savings can be about $25,000 over the life of a 25-year loan if the tender delivers an interest rate half a percentage point lower than the borrower would otherwise pay, he says.

"One important difference from existing services is that the borrower sees actual expressions of interest from the lenders, rather than a `filtered’ summary. Often borrowers only get one or two bank offers to choose from. Loansurf gives the power of choice back to the borrower,’’ Fermah says.

He expects mortgage demand generally to increase. "Our information suggests the residential housing market has bottomed and, technically, we are heading into two years of increased demand and therefore increasing house prices,’’ Fermah says.

That view is on patterns of the last 65 years in New Zealand "but may be subject to variance as we now get buffeted by the global economy,’’ he says.

The Loansurf website also offers potential borrowers an interest rate forecaster, collecting the views of the bank economists on both floating and short and long term fixed rates.

Fermah says companies are negotiating licenses to use Loansurf’s technology in Australia and Britain.

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