Mortgages Free Advice

Mform, a new online mortgage business that bypasses intermediaries by linking consumers directly to lenders, is targeting a 1% share of the UK mortgage market in its first year of operation.

The company has launched a website that permits consumers to search thousands of home loan options. Using Moneyfacts’ data, the service enables consumers to create best buy lists of products and then to directly arrange mortgages with lenders, either through web application pages or through a call centre.

Mform’s goal is to handle 24,000 drawn down mortgages in its first year of operation, or 2,000 mortgages a month.

Eamonn Rice, chief executive of the new venture, and a former partner in the accountants Ernst & Young, said: “We’re setting out to revolutionise the market by, where appropriate, taking out the intermediary, by trying to equip customers with a better knowledge of the mortgage market, by giving them a clearer understanding of the 6,000 products and the 120 lenders on the market, and making it possible for them to complete a mortgage application quickly and easily from the security of their own home.”

Deals have already been signed with a group of lenders including HBoS, Abbey, Lloyds TSB, Northern Rock, Alliance & Leicester, Dunfermline and Chelsea, which together account for more than 60% of the UK mortgage market.

Mr Rice added: “We expect to have signed up the rest of the market within the next few months.”

Mform charges lenders a commission of 0.175% of loan value, roughly half of the commission charged by brokers. Mr Rice said commission rates are lower because Mform does not handle credit and affordability checking, nor identity verification.

The venture has received a reported £5m in start-up funding from Artemis Investment Management, whose retail funds have acquired a 25% stake>