The UK-based robo-advisor has launched a mortgage advice service in partnership with mortgage broker Mortgage Advice Bureau to help users buy a home or remortgage, per a press release seen by Insider Intelligence. Moneybox Mortgage Advice first launched in beta to a select group of existing customers and offers phone or in-app chats with mortgage advisors to help users find the mortgage that’s best suited to their individual needs. The firm aims to roll out the service to all users over the next few months.
The new feature brings Moneybox closer to offering an end-to-end homebuying solution, enhancing its value proposition among users. Moneybox already offers a lifetime ISA, which helps users save for their first home by adding a 25% government bonus on up to £4,000 ($5,129) each year. The ISA comes with a 0.85% AER, making it a more enticing offering than existing alternatives. However, securing a deposit is only part of the challenge in buying a home: 40% of UK first-time buyers are confused by the constantly changing deposit requirements and lending criteria. And this has been exacerbated by the pandemic, with struggling borrowers often unaware of the effects payment holidays have on their interest charges and credit scores. With the new mortgage advice feature, Moneybox can alleviate such uncertainties in addition to helping save the necessary deposit, solving more of a user’s homebuying needs under one app.
The launch also highlights mortgage-related tools as key features in UK digital wealth managers’ ongoing quest to meet all users’ financial needs under one roof. Fellow robo-advisor Nutmeg, which also has a lifetime ISA, partnered with online mortgage broker Habito in August 2019 to offer free mortgage advice to its users. And just last October, Wealthsimple announced it will develop additional financial products, including mortgages. This underscores how a robo-advice offering alone is no longer sufficient, pitting digital wealth managers against each other in a never-ending arms race. To be more competitive, Moneybox will need to add other features that both help users with their finances and enable the digital wealth manager to better stand out in the crowded market. For example, it could look to add insurance coverage to further sharpen its competitive edge, as Betterment—one of the largest US robo-advisors—did last year.