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dfinanz set to disrupt mortgage lending

dfinanz set to disrupt mortgage lending with lender agreements and first refinancing deals

dfinanz, the Australian fintech company focused on mortgage refinancing, today announced it had entered into agreements with three Australian lenders and seen the first engagements between borrowers and lenders on the platform.

dfinanz allows borrowers to set their desired interest rates – their ‘Fair Rates’ – to refinance mortgages in an online marketplace. Lenders can ‘hit’ these rates with offers for loans based on these rates.

Founder Peter Coco said the firm was well positioned to give consumers more power while not requiring banks to change their existing lending infrastructure.

“dfinanz was conceived around the idea that home buyers should be able to help set the interest rate they will pay on their loans,” he said. “Comparing rates is really difficult and time consuming and even then the advertised rates won’t be the same as what you end up paying. With dfinanz, the borrower tells the banks what rate they want to pay, and the banks come to them. It’s turning the traditional model on its head but the beauty is that is doesn’t fundamentally change the way the banks do this business from an operational perspective. That’s why we think it will work – and is already working.”

The average Australian mortgage is now $444,000 - saving 0.5% on a loan like this could save the average homeowner more than $22,000[1], but the ‘stickiness’ of mortgages has meant most people miss out on getting the best deals.

“Switching loans has always been a daunting process – most people know it could be a good idea but the difficulties involved put people off,” Coco said. “Now, a would-be borrower can set up a dfinanz account in about five minutes, then sit back and wait for the bank to come to them.”

Coco said the low-cost dfinanz model offers hard dollar and productivity gains to lenders. “It works well both in a centralised model, where lenders dedicate resources to reviewing and accepting rates, and decentralised models where they allow front-line staff to use dfinanz to find sales opportunities,” he said. “Lenders don’t have to pay big commissions to us in the way they do under existing frameworks, resulting in savings that can be passed on to customers. We are talking to a range of participants in the home loan market ranging from retail banking executives to mobile bankers and mortgage brokers.”

Coco said the interest rates being set on dfinanz were good reflections of reasonable rates within the current economic environment. “What we’re seeing is people setting rates around 0.5% lower than the rates they’re currently paying, but still well within the boundaries of what’s reasonable for a bank,” he said. “The average rate on the platform this week is 4.09% - people aren’t looking for silly discounting. They just want to pay what’s fair.”

dfinanz is a social market network, with a platform where users can both share experiences and opinions on finance issues as well as refinancing their mortgages. The firm is currently in its Series A fund raising process.


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