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ComparaSave and the Budding Online Mortgage Market

ComparaSaveA few weeks ago, insurance and mortgage comparison website quietly bought a competing site called

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 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.

Yousry-BissadaKanetix 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 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