London startup Trussle has come a long way in the last year. Founded in 2015 by Ishaan Malhi, a former real estate and structured finance analyst at Bank Of America Merrill Lynch, and Jonathan Galore, an experienced fintech entrepreneur, the online mortgage advisor is regulated by the FCA and already claims to manage nearly £500 million of mortgages.
So, how did they get there?
The incumbent model of getting a mortgage involves either going to your bank and being locked into their offers, doing your own shopping around, which can be extremely time consuming and involves reams of paperwork, or using a high street broker.
Brand and content manager at Trussle Oli West says these "big guns" brokers take up "70 percent of all mortgage deal flow" and are incentivised to make sales.
"It is largely a numbers game and they have shareholders to satisfy," he says. "There is lots of paperwork, calls after hours, working to their schedule not yours. The average advisor can process ten applications per month."
Naturally, West says Trussle does things differently. "It's online, so 24/7 accessible and generally faster, so what can take up to an hour to get a quote takes three minutes," he says.
If a customer does still want to speak to someone - after all, it is a pretty big decision - Trussle has advisers on the end of the phone.
"Our processes are automated and that frees up our advisers from admin to be on-hand from a customer need perspective," West says, adding that the small team of advisers can handle 100 customer applications per month.
What's more, this automation means advisers are less likely to recommend unsuitable products, leading to less rejections. Malhi told Mortgage Solutions back in April: “So the adviser considers affordability, eligibility and suitability. That’s what advice is, a function of those three components. We know which lenders will lend to you, we know how much lenders will lend to you and the suitability is our algorithm mixed with what the adviser’s doing.”
Trussle is still an intermediary, it doesn't sell mortgages. "We aren't a lender, we're an adviser or broker, so the banks still grant the mortgage, but we do the heavy lifting," says West. The startup simply takes a 0.35 percent procurement fee from the lender, on average, after approval.
Trussle was able to get approval from the Financial Conduct Authority (FCA) in just three months.
Trussle aggregates mortgage products via an API feed provided by a specialist company, and works with the Mortgage Advice Bureau (MAB), giving it access to roughly 11,000 deals from 90 lenders in the UK market. Companies like Zillow provide APIs for mortgage rates in the USA, and data.gov has several open mortgage data feeds.
Trussle is building its own API so that other companies can integrate its mortgage services and feeds within their applications. This is significant as the UK government looks to open up banking in the UK, paving the way for a world where banking is a platform.
In practice this means customers would be able to have all their finances manageable within one app, whether that’s their current account or mortgage, and with multiple providers.
UK challenger banks like Mondo and Atom have already talked about wanting to integrate third parties into their banking applications, such as Nutmeg for investments and, in theory, Trussle for mortgages.
Established estate agents and property portals, like strategic partner Zoopla, could also effectively outsource the mortgage process to Trussle via an embedded API on their site.
Fixed rate vs standard variable rate?
One of the major consumer problems with mortgages is transparency, and West says customers are missing out on huge savings every year simply because they don't know about the alternatives.
"We did a survey a few months ago that showed 60 percent of mortgage owners haven't remortgaged because they find the process overwhelming, but on average they are losing £2,800 a year stuck on a standard variable rate where they could have remortgaged onto another fixed rate," he says.
Trussle's solution is a unique mortgage tracking service, built on the aforementioned API, which will automatically compare a customer's existing mortgage with alternatives in the market on the backend. "So if new deals come, in our technology figures out that it would make sense to switch and we ping you an email," West explains.
The tech stack
Trussle takes a very transparent startup approach to its tech stack, to the point that it posts the whole thing online.
It is a cloud-based platform, with everything hosted on Amazon Web Services public cloud, and Trussle has even developed some proprietary internal tools to help its mortgage advisers work better.
Trussle has been backed to the tune of £1 million by angel investors LocalGlobe and West's former employer Seedcamp. Property search giant Zoopla announced a strategic partnership with Trussle in February.
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