KEY POINTS:
A new home loan auction website is attracting plenty of interest, but the jury is out on whether it will become a genuine alternative to mortgage brokers.
Commentators expect Fundit will appeal to savvy home buyers who know what they want, but first-home buyers will probably still need some "hand-holding".
Fundit allows those seeking a home loan to access the market via the internet, set up free private auctions detailing their home loan needs, and make lenders compete online for their business.
So far only eight lending institutions, including Kiwibank and BNZ, are on board, but more are expected to join as the site gains momentum.
"It's a good experiment and it's certainly being used by the banks that don't use mortgage brokers," said Massey University centre of banking studies director, David Tripe. "Banks not currently using it are wanting to see how well it works before deciding what to do about it."
Consumer magazine editor David Naulls said the Fundit concept was a promising idea. "It saves a lot of shopping around. It probably appeals more to buyers who know pretty precisely what they want."
Fundit chief executive Abby Foote said consumers wanted control, and often did not know if they were getting the best deal with mortgage brokers.
Experienced house buyers were an obvious target market. The site has been operational for a week and when the Herald contacted Ms Foote yesterday, more than 30 auctions were underway.
Megan Salt, chief executive of the New Zealand Mortgage Brokers Association, said Fundit would likely find a niche in the market. "There would be some people who would use it if they were savvy enough and sophisticated enough," she said.
"The average person in the public finds the process quite complicated and confusing and they want to go to a mortgage broker, sit down, see the whites of their eyes and develop a relationship of trust."
