By carrying out a brief inventory of the 100% web mortgage loan market, the observation is clear: the choice for potential buyers is still very limited. Only three banks offer this service in Belgium: Keytrade Bank, Hello Bank! (BNP Paribas Fortis) and KBC.
At what rate?
Online banks claim to give customers an ultra-competitive rate and are very transparent compared to traditional banks, thanks to their lower cost structure since they do not have a physical branch. Is this really the case?
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By taking as a point of comparison the 20-year fixed rate, with a quota less than or equal to 80% of the purchase price, we can consider that this is indeed true. The poster rate of traditional banks is almost systematically higher than that of online banks. For example, at Belfius, the 20-year fixed rate is 2.03% and, at BNP Paribas Fortis and ING, it is 3.20% and 3.65% respectively. For online banks, the best Keytrade rate for the 20-year fixed rate is 1.33%, while at Hello Bank! it varies from 1.79% to 1.29% depending on the reductions granted. Small flat, at KBC, the online rate is identical to that applied in the agency, that is to say, 2.96% (poster rate).
“Online banks are much more transparent if we compare them to the traditional system where most banks receive guidelines related to the type of customer,” says Brecht Coene, of the site guide-épargne.be which specializes in comparing rates of interest.
Nevertheless, don’t expect to negotiate these rates too much. They are more or less “final” depending on the bank, unlike the rates posted by traditional banks where it is easily possible to negotiate, or even to bring into play competition between several institutions.
“Keytrade directly offers the best rate to its users, without possible negotiation. This is a positive element for the client because instead of spending a lot of time and energy negotiating a rate, which will depend on the negotiation capacities or the time that can be dedicated to this activity, he is directly entitled to the best rate he can hope to obtain, without any negotiation effort and without loss of time”, explains Thomas De Boe, head of product management at Keytrade Bank. At KBC and Hello Bank! it’s a bit different. It is not possible to negotiate the rate as such, but the purchase of certain ancillary products may have an impact on the rate granted. “The customer is free to enter several options to reduce his rate, such as outstanding balance insurance, a higher personal contribution, direct debit of income, etc. It is possible to obtain reductions of up to 0.50% “, details Valéry Halloy, spokesperson for BNPPF.
Among these online banks, only KBC allows you to opt for a variable rate. For the other two banks, it is currently only possible to obtain a fixed rate, otherwise, it will be necessary to contact a traditional bank and inevitably go to an agency.
To apply for credit online, it is not necessary to already be a customer of these banks. The conditions required to access it are identical for each of them: a natural person over the age of 18 domiciled in Belgium and who wishes to take out a loan for private purposes.
At Keytrade, the user enters several data on his project (type of property, price, location, tax reduction or not, etc.), his income, and his expenses. The bank then presents the result directly to him: possible credit or not, as well as the final rate. “The user can then save this simulation, which remains valid for two weeks. During this period, he can encode his request. He must then complete more information on his identification, his income, his expenses, the project, the property that he is buying, etc. The customer then receives an application form that includes all this information and which he must sign (electronically). Once the customer has sent us all the supporting documents (payslips, signed compromise, etc.), a credit specialist analyzes the request and, if necessary, sends a credit offer to the user who can sign it electronically”, explains Thomas De Boe. In addition to mortgage loans, it is possible to apply for renovation, construction, and refinancing loans via Keytrade Bank.
Online banks are much more transparent if compared to the traditional system where most banks are given guidelines related to the type of customer. Brecht Coene
How Hello Bank! is quite similar. All the user has to do is specify a data series such as the type of project, the number of borrowers, their income, their existing credits or not, and the number of dependents. The bank then estimates the customer’s ability to repay, which must then mention the purchase price, the type of property, its location, and whether it benefits from a tax reduction or not… Hello Bank! then presents the result: monthly payments, rate, initial contribution, etc. “In a few clicks, the prospective buyer receives an indication to the ‘next second’ of the amount of the monthly payment that he can borrow for the purchase of a home”, indicates Valéry Halloy, who adds that Hello Bank! only offers loans for purchase or construction projects. “The simulation remains valid for 7 days. Once it has been saved, the customer, therefore, has 7 days to submit his credit request.”
The same at KBC, the customer enters his personal data concerning the project, its location, its income, its expenses, etc. to simulate a credit application. In about ten minutes, he can “carry out a simulation and then move on to a digital credit application in due form”, explains bank spokeswoman Ilse De Muyer. “The client gets a personal and competitive rate and is immediately fixed on the acceptance or not of his request. And the rate remains valid for two weeks.”
That’s it for the basics. But if your file is a little more complicated, for example, if you are a beginner self-employed, or if you do not have a large initial contribution, the classic network remains more suited to your borrowing profile. “As soon as the file becomes more complex, it is practically impossible to go through an online bank”, supports Brecht Coene.
Application fees and ancillary products
At Keytrade Bank, the administration fees amount to exactly… 0 euro. “We are the only bank not to charge administration fees”, does not fail to remind Thomas De Boe. This is indeed the case in Hello Bank! they amount to 350 euros and at KBCwhere the fees are identical to those charged in branches, 500 euros.
For the ancillary products it is not never obligatory to subscribe to it, but with some nuance. At Keytrade, having your income domiciled, taking out home insurance or outstanding balance insurance via the bank does not affect the rate it grants you. While at Hello Bank! and KBC, the more ancillary products you add to your credit, the lower your rate will be (by a maximum of 0.50% at Hello Bank! and 0.35% at KBC). If they are not compulsory, these two financial institutions push you to subscribe to them, which is not the case with Keytrade. “There is no obligation to subscribe to another product to obtain our best rate, unlike other banks”, points out Thomas De Boe of Keytrade.
Between the time of the credit application and the response from your online bank, it may take a minimum of 48 hours at Keytrade Bank versus 6 days at Hello Bank! KBC, for its part, gives no indication of the timeframe for the procedure, except for the simulation and the request: around ten minutes at most.
“It all depends on the customer and the time frame in which he sends us all the supporting documents”, explains Thomas De Boe. Among which are necessary identity documents, payslips, signed agreements, etc. “If the file is complete, clients normally receive a response within 48 hours.”
At Hello Bank!, once the customer has submitted his loan application, this is the process that begins: “Once the application has been submitted, the customer makes a call with a member of the Hello Bank! next day. The credit application is then sent to the customer for signature and the credit analysis is communicated one to three days later depending on the case. If the credit is accepted, the offer is sent to the customer, who must sign it within 14 days. Theoretically, if the customer is reactive, he can close the process in six days”, details the spokesperson for the bank.
What if I need help?
Online banks have advisors available by phone or e-mail. But if you need more in-depth advice or negotiate your rate or request a variable rate… you will have to go to an agency, which is not possible with Keytrade since there is simply none. “We don’t have an agency support is provided by credit analysts available by phone or e-mail”, explains Thomas De Boe.
On the side of Hello Bank!, which is a subsidiary of BNP Paribas Fortis, the customer can always, if he wishes, go to a BNPPF bank branch. “At Hello Bank, there is no counter, no agency. But thanks to the complementarity with BNPPF, candidate borrowers with more complex files or needs can go to the BNPPF network”, recalls Valéry Halloy. KBC customers can also get in touch by phone, e-mail, or visit a branch. “The subsequent processing of his request takes place through the channel chosen by the customer: telephone or online chat or in a bank branch”, explains the spokesperson.