A few weeks ago, insurance and mortgage comparison website Kanetix.ca quietly bought a competing site called ComparaSave.com.
ComparaSave was started by its previous owner (Torstar) just four months ago. Among other things, it features a tool that lets consumers compare rates from different brokers and lenders.
The deal was actually part of a larger transaction where Kanetix Ltd. bought InsuranceHotline.com from Torstar. But the mortgage story is the most interesting part (to us).
One notable aspect of this deal is Kanetix’s growing interest in the online mortgage space.
Kanetix President/CEO Yousry Bissada has a long track record of success in the mortgage industry. When guys like him do something mortgage-related, we take note.
While speaking with him last week, he told me (with conviction), “I believe online mortgages are going to get bigger and bigger. It’s inevitable…”
He says he has “no doubt” that consumers will someday pick their own mortgages online, just like they pick stocks on iTrade. He equates future online mortgage models to Expedia and Travelocity, but notes, “I don’t think it’s going to overtake the traditional ways of doing mortgages, at least not over the next few years.”
Online mortgage shopping “is becoming more and more accepted,” but it’ll take “years” to grow to a critical mass, adds Bissada. Before then, online mortgage origination has to become “a lot more accepted and trusted” he says, since mortgage customers share a lot more information than online traders.
Also interesting is the fact that Kanetix already has a mortgage rate comparison site. See Kanetix Launches Online Pre-Approvals.
The current plan, says Bissada, is to operate both sites independently. Kanetix’s site will focus on sending qualified mortgage leads to name brand lenders and brokerage partners. ComparaSave will make money from brokers who pay for “raw” leads. In short, ComparaSave adds another footprint on the web for the company to drive mortgage leads.
Thus far, Kanetix has only dabbled in mortgages, Bissada admits. But it seems apparent that he’s about to attack the online mortgage space, and he’s got the management ability and connections to do it.
TorStar, a media giant, will be a minority shareholder in Kanetix going forward, which (we speculate) should be positive for Kanetix’s ability to promote its mortgage properties. (Kanetix bought InsuranceHotline.com/ComparaSave from TorStar for an undisclosed amount of cash and shares.)
In coming months, we’ll keep an eye on how the ComparaSave mortgage site evolves. At the moment, it’s significantly under-developed when compared to competitors like RateHub and RateSupermarket. But that could change quickly.
Rob McLister, CMT
Last modified: April 26, 2017
Comparasave better work on its rates. The best five year fixed I see is 2.99%, which won’t turn many heads.
I am in full support of the fact that online mortgaging systems will depend upon trust before they grow to a critical mass. Mortgages not only involves too many complexities but they also have severe formalities which can’t be performed in an exact manner through online systems currently.
When we see a former top executive of a broker tech company turn to rate sites as the future of our business, brokers need to ask themselves: is it time to stop crying about rate discounting and start to look at rethinking their businesses in a world of commoditized mortgages.
Travel agents all said that Expedia was a poor substitute for travel professionals but we know what happened. Stock Brokers all said no one would use online direct brokerage without their sage advice but we know what happened. The list goes on.
This above all is true: you can’t fight the future.
When it comes to financial transactions, I find more and more people are using the internet. I recently got a quote for my home insurance from another online service, Insurance Hunter and was pleasantly surprised. Their site was really easy to use and I quickly got back 3 quotes to compare. I would look into them if and when you have to buy home insurance as well.