Cheapest personal loan uk

Property: You netted a home so why not the loan?

ife has become a lot easier for house hunters since the dawn of the internet. Traipsing the streets peering into estate agents' windows is no longer unavoidable; many potential property buyers can now log on to the net and take a virtual tour of a flat or house without leaving the comfort of their living room.

But while the web is proving invaluable for finding a home, not so many buyers are keen to apply for a mortgage online. In January 2001, Morgan Stanley Dean Witter predicted that 20 per cent of mortgages would be completed in cyberspace by 2005. This prediction already appears rather wide of the mark.

Most homebuyers prefer to receive advice from a broker or mortgage provider, rather than make their own decisions online. "A lot of people get to the point when they have to click on the `apply now' button and they hesitate," says David Hollingworth at mortgage broker London & Country. "I think there is an innate caution. Even if they've made their own decision, a lot of clients want confirmation that it is the right one."

But, he adds, the picture is changing. "Applying for a mortgage online is soon going to be par for the course. This will help speed the application process up for the client."

Although internet applications have been few and far between, some lenders and brokers report a pick-up in recent months. Britannia building society now processes 10 per cent of its mortgage requests online, for example - even though it only set the service up two years ago.

"The design of our site means the process is very fast," says a spokesman for Britannia. "The average mortgage application form has around 100 questions; we cut it down to 40, which complies with Financial Services Authority regulations.

"The whole procedure takes 15 minutes from start to finish. The customer receives a confirmed mortgage offer - not an agreement in principle - because we have an interface with [credit reference agency] Experian. We send out an application form to sign, they return it, and the deal is subject to the property's value and salary verification."

Norwich & Peterborough building society launched a similar service in March; already it accounts for 10 per cent of all mortgage requests. "Online applications are growing in popularity generally with homebuyers, but we expect it to remain a niche sector for us for some time," says a spokeswoman.

Mortgage broker Charcol reports a "significant increase" this year. "People are becoming more savvy and more prepared to buy online," says Ray Boulger, senior technical manager at Charcol. "Sites are also becoming more user- friendly."

Some lenders, such as Nationwide, don't offer borrowers the choice of applying online, but you can get an "agreement in principle" via its website. A spokeswoman for the building society says it takes about 15 minutes to complete the online form and customers get a "yes" or "no" within 60 seconds.

Once buyers have had an offer accepted on a property, they can continue with the application in a branch, over the phone or through the post. Nationwide has no plans to introduce an online option as it feels there is enough choice already.

Broker sites tend to be more useful to borrowers. Not only do they offer calculators enabling you to work out how much you can borrow and what your repayments will be, they allow you to compare a range of mortgages. Lenders' sites are restricted to their own products.

Another advantage of a broker's site is that borrowers aren't charged the usual fee. Charcol customers generally pay around 0.5 per cent of the purchase price in commission but there is no charge via the website (www.charcolonline.co.uk).

Although a small number of people apply for a mortgage online, many more borrowers use the internet as a research tool. Moneysupermarket (www.moneysupermarket.com) allows people to compare more than 8,000 mortgages, and Stuart Glendinning, its marketing director, says the research element remains the real selling point of the internet. "Our mortgage section is always one of the two most popular areas of our site by a long way - the other is personal loans. But there is some distance to go before the majority of borrowers feel happy to complete their application online."

`The easiest mortgage ever'

John and Ruth Boam (both 31) live in Birmingham with their five- month-old daughter, Olivia. The couple recently remortgaged their home over the internet. They chose Britannia's flexible deal: a 2.35 per cent discount for the first six months, followed by 0.85 per cent over the Bank of England base rate for the life of the loan.

"I searched for the cheapest flexible deal via an internet search engine and the Britannia mortgage came up," says Mr Boam. "There was a link to the Britannia site so I went on to it and filled out a form. Someone from Britannia rang me back and I gave the rest of my details over the phone, which took about 20 minutes. They sent all the paperwork in the post for me to sign and that was it."

Mr Boam received no advice over the phone, which he says he was happy about as he'd already done his research and knew this mortgage was right for him.

"I would definitely use the internet again," he says. "It was the easiest mortgage I have ever taken out."