Business-mortgage partnerships catching on abroad

Is working with a business to provide mortgages to their employees the next big thing?

As first reported by Rachel Lovell in our sister-magazine Mortgage Professional America, Clydesdale Bank and Yorkshire Bank have reached an agreement with UK-based professional services firm KMPG to provide its staff with preferential mortgage rates. KPMG announced the initiative to its employees last week as part of a private banking package with the two lenders.

The 12,000 KPMG employees will now have access to below-market average mortgage rates through the two lenders along with discounted travel insurance. “Owning a home is fast becoming a fairytale for all but society’s wealthiest,” said Simon Collins, UK chairman of KPMG. “We are working hard to raise the issue with policy makers and clients, but we also want to make a tangible difference to our staff who also face this problem.”

Similar partnerships are not unknown in Australia; nor are in-house mortgage brokers. Brokerage Moneywise Global Home Loans is 100% owned by Flight Centre, and was “born out of the Directors' desire that all Flight Centre Limited staff be success stories in their own right”.  The brokerage has expanded and now offers services to a number of employer groups and individuals.

KPMG hopes the new initiative addresses the increasingly high home prices in the UK – an equally valid concern in Australia. High prices, the firm worries, could make recruitment for KPMG more difficult. The average home price in London in August was £476,000 ($883,292), a nearly 22% year-over-year increase, according to data from the Land Registry’s House Price Index.

Mortgage subsidies were a common practice for UK companies in the 1970s when interest rates were high. 

Have you entered a partnership with a business to provide broking services? Are you an ‘in-house’ broker? Tell us your experiences below, and read the original article here.