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Is AI the future of mortgage advice?

This week, tech startup Habito claims to have launched the world's first artificially intelligent 'digital mortgage adviser'. 

The robo-adviser takes into account a borrower's employment, salary and financial information and uses an algorithm to search through hundreds of products and provide a suitable mortgage.

Habito says its software can provide consumers with the information they need in an average of ten minutes.


In order to configure the service, the startup analysed hundreds of mortgage advice interviews to determine what borrowers need and what forms the basis of advice. 

“Our digital mortgage adviser is a huge step forward in making mortgage advice accessible for consumers in the way they need it most: unbiased, always available and most importantly free,” says Daniel Hegarty, chief executive and founder of Habito, which launched in April.

Habito says its digital mortgage adviser is a direct response to the Financial Conduct Authority's Financial Advice Review Report, released late last year, which called for more accessible financial services for consumers.

At the moment, borrowers have to speak to a human broker in order to accept the mortgage advice from the digital adviser. 

However, Hegarty told the FTAdviser that in a few months he intends for consumers not to have to speak to a broker.

He told the publication that the digital adviser is designed to take away 'manual' work from brokers, leaving them to deal with 'complicated customers'.

“As ‘Robo advice’ is a recently invented term, it means different things to different people,” Mark Lofthouse, chief executive of Mortgage Brain told Estate Agent Today. 

“To me it means enabling clients to educate themselves using interactive tools to a point where they feel the need for advice. These capabilities, however, are not new.”

He says his firm has been providing interactive best buy tables and the ability for borrowers to search for mortgages that meet their needs for years.

“Additionally, apps like UKMortgages, which allow consumers to search and compare mortgages and then get in touch with a broker, have been used over 1.4million times,” he explains. 

“So, will consumers use these capabilities? The short answer is ‘yes’ but will this replace the need for a broker? The short answer is no, however, over time the more straight forward transactions will be done electronically.”

Yesterday, the Bank of England decided to hold the base interest rate at the historic low of 0.25%.

A number of economists have forecast that the rate will be cut again in November.


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