Sydney fintech startup LoanDolphin exceeds $100 million in home loan auctions through its platform

- August 30, 2016 3 MIN READ

Sydney loan bidding platform LoanDolphin has reached a significant milestone, announcing it has exceeded $100 million in home loan auctions through its platform, helping customers save up to $130,000 on a $500,000 home loan over 30 years.

Founded by two ex-bankers, Ranin Mendis and Rod Dutra, LoanDolphin is an online home auction platform, dubbed the “eBay of home loans.” The aim is to save consumers tens of thousands of dollars by getting bankers and brokers to fight for their home loans.

First launched in February this year, the fintech startup went through the H2 accelerator program where it received $100,000 in investment from founder Toby Heap. LoanDolphin used the accelerator program to create a value service for people to refinance or obtain new home loans at rates not advertised by banks or lenders.

“The simplicity, efficiency and negotiating power provided to customers via LoanDolphin’s zero cost and obligation free service have contributed to our exponential growth,” Mendis said.

It takes three minutes for customers to upload their home loan requirement (anonymously), before mortgage brokers, lenders and banks start the bidding wars to offer competitive home loan rates.

“Most of these rates are either not advertised or offered to buyers the first time they try to secure a home loan,” explained Mendis.

The startup generates revenue by charging an “introduction fee” to brokers or banks, which totals to 22 basis points of a settled mortgage. These points or “fee” is lower than a typical 60 basis point fee that commission brokers receive from banks. Essentially the customer is not charged and a commission is made from the mortgage broker and banks once a loan has been settled.

From working in the financial services sector both cofounders had experienced the pain customers went through to secure a good home loan or refinance their home loan. Mendis explained that previously all the leg work and negotiating had been up to the customer.

In creating LoanDolphin, Mendis and Dutra saw that this could be the end of banks and lenders taking advantage of customers who have little to no bargaining power.

The refinance market alone is worth $100 billion and the overall home loan market is worth upwards of $1.5 trillion. Fintech startups have started to make a move into this space and discover the opportunity both markets hold. Comparison websites and other fintech startups like funding.com.au helps borrowers secure short and medium term loans.

However, Loan Dolphin’s greatest competitor may be fellow Sydney startup and H2 Accelerator grad HashChing, who has already reached a $1 billion milestone in loans negotiated through its platform.

Close to a year ago HashChing launched its online home loan marketplace as the first of its kind in Australia. Founded by Mandeep Sodhi and Atul Narang, HashChing was created to offer borrowers pre-negotiated home loan deals at rates better than the big banks.

“While 54 percent of Australians now trust mortgage brokers for home loans, finding a recommended local mortgage broker with ratings is a challenge as there is no other platform doing this currently,” said Sodhi. “In this on-demand economy, consumers are used to services delivered in minutes and expect a similar experience in mortgages.”

Earlier this month former head of wealth strategy at ANZ Banking Group, Helen Lorigan joined the HashChing advisory board to help drive the startup’s marketing campaigns. Since launch HashChing has now received $1.5 billion worth of home loan applications across its panel of more than 40 lenders.

The home loan market is still quite a large space to play in and startups are in a good position where consumers are turning towards them for greater transparency and more competitive prices.

LoanDolphin is now in the stage of looking for more direct banking partnerships and Mendis hinted that there are talks underway for possible expansion into Asia within the next year or two.

Image: Ranin Mendis and Rod Dutra. Source: Supplied.