Both Habito and Trussle were born from an acute consumer frustration with the existing mortgage process.
"We shouldn't have to think about mortgages. They are soul crushing, dull things that bring nobody any pleasure," the founder and CEO of Habito Daniel Hegarty told Techworld over coffee this week.
Oli West, brand and content manager at Trussle, focuses on the mortgage broker themselves as the source of pain: "There is lots of paperwork, calls after hours, working to their schedule not yours." By making the entire process digital both startups say they can save you time, stress and money.
Hegarty says that both his company and Trussle are "trying to solve the same consumer problem" but that where Habito stands out is its commitment to providing a "totally digital experience" to customers.
Trussle would counter that, with CEO and founder Ishaan Malhi telling Techworld: "Many of our customers are happy for their entire experience to be online, but there are still many who prefer a friendly voice at the end of the phone. We've used technology to automate as much of the admin as possible so our advisers have more time to spend with our customers."
Both startups have some bold claims for consumers. Habito says it can get you a mortgage seven times quicker than a human broker. Trussle says it can get you a quote in three minutes instead of an hour, on average.
Both startups are Financial Conduct Authority (FCA) approved and don't charge the customer, making money by taking 0.35 percent procurement fees from the lenders. Who wins will come down to scale and winning hearts and minds.
Side by side, their home pages look extremely similar, with both sites offering two simple options: buy a home, or save on an existing mortgage. Once you click through you are given a web-form to fill out and get an instant quote.
This is where the experience differs slightly. From here Habito works primarily through a chatbot interface, with some web-forms, whereas Trussle uses a more traditional web-form process and issues you a mortgage in principle to show estate agents when you are looking at homes.
The traditional mortgage process involves either going to your bank, shopping around yourself, or using a high street broker, which involves phone calls, meetings and lots of paperwork.
Hegarty explains that Habito's chatbot simply seemed like the best format for helping customers, and that it is only as powerful as the underlying database and models they have. "The chatbot is helping you build a query for your data set," he explained. "So we build parameters for specific customers so we can query this lovely clean database we have created."
The data is the important part when it comes to providing customers with the right mortgage, as the lenders aren't the most tech savvy organisations, with many of them not having APIs or data feeds to plug into. This meant that Hegarty and his team had to do a lot of the heavy lifting themselves early on.
When Hegarty nearly lost his dream home because of a stream of clerical errors he started to ask around and see if the system could be automated to cut out the human aspect of mortgage brokerage. When he looked he found "nothing. No aggregated eligibility or affordability".
The key word here is aggregated, and this was the hardest part for Hegarty. He began mapping the broker pools and spidering data from the various websites to aggregate the data across the industry. "Sat in your kitchen you think how difficult can it be? But it is pretty fucking difficult," he says. "It is like being a librarian. It is not fun, exciting work".
Now Habito's database is powered by aggregators like IRESS and another unnamed data provider daily, so that Habito's chatbot can search around 60 UK lenders for the best deal. Habito then automates the application itself by mapping lender’s intermediary portals, "to allow us to check their eligibility and affordability criteria", Hegarty said.
Trussle on the other hand 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 90 UK lenders. It then layers its own algorithms on top to help find customers the most suitable mortgage.
Both startups offer a mortgage tracking service off the back of these databases to ensure that customers are always getting the best deal.
West from Trussle says: "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."
No one has succeeded at becoming a trusted brand in the mortgage brokerage space, with most UK residents unable to name more than one. Much like the new breed of UK challenger banks, Habito and Trussle hope that their modern, digital approach, and some savvy marketing can change that.
Where Trussle may have the jump on Habito, at least in the short term, is its relationship with property aggregator Zoopla and its massive audience of potential buyers. Naturally, Hegarty isn't too sure though, saying: "If you are completely dependent on a third party in terms of [customer] acquisition that leads to problems down the line."