Europeans switch to Web for mortgages

Europeans switch to Web for mortgages

Europeans will use the Internet to originate half a million mortgage loans in 2003 - five per cent of total new home loans - and this figure will triple by 2008, according to forecasts from Forrester Research.

Forrester says gross new Internet-originated mortgages will grow from 495,000 in 2003 to 1.6 million in 2008 - equivalent to 230 billion euros. The increase will be driven by remortgagers in the UK and Nordic region who outnumber first time buyers among online applicants by three to one.

According to the research, German bank Interhyp reported 400 million euros in online mortgages - equivalent to some 2000 loans - in the first half of 2003 alone.

Despite this, the UK will have the highest number of new net-originated mortgages in Europe this year, with 126,000 applications. Charlotte Clark, Forrester analyst, says this growth is largely due to the success of firms like Charcolonline, which claims to accept 10% of British online sales over its mortgage broking site.

Clark adds: "The number of UK Internet-originated mortgages will grow to twice that of the next largest market - Germany - by 2008, spurred by a much higher proportion of owner-occupied homes."

Web-originated mortgages accounted for more than 10% of all gross new home loans in Sweden, Norway, and Finland in 2003, a higher proportion than in any other European market and twice the European average.

Forrester says mortgage firms lead the field in online applications in northern Europe, for instance SBAB in Sweden receives up to 60% of all new applications over the Internet.

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